Due to an Error in Computing Depreciation Expense, Crote Corporation

Multiple Choice

Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $60 million as of December 31, 2018. Crote has a tax rate of 40%. Crote's retained earnings as of December 31, 2018, would be:

A) Overstated by $36 million.
B) Understated by $36 million.
C) Overstated by $24 million.
D) Understated by $24 million.