Use the Following Information for Questions

Multiple Choice

Use the following information for questions.
Ignore taxes.
Peach Inc.'s financial statements for the years 2017 and 2018 contained errors as follows:
-Assuming that none of the errors were detected or corrected, by what amount will retained earnings at December 31, 2018 be overstated or understated?

A) $4,000 understated
B) $5,000 overstated
C) $8,500 understated
D) $11,500 understated