Use the Following Information for the Following Questions:
Ignore

Multiple Choice

Use the following information for the following questions:
Ignore taxes.
Peach Inc.'s financial statements for the years 2019 and 2020 contained errors as follows:
$\begin{array}{c}\begin{array}{lll}\\\text {Ending inventory}\\\text { Depreciation Expense}\end{array}\begin{array}{c}\underline{2019}\\\text {\$ 3,000 \quad understated}\\\text {5,500 \quad overstated }\end{array}\begin{array}{c}\underline{2020}\\\text { \$ 5,000 \quad overstated}\\\text {3,500 \quad overstated}\end{array}\end{array}$

-Assuming that none of the errors were detected or corrected, by what amount will retained earnings at December 31, 2020 be overstated or understated?

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