Due to an error in computing depreciation expense, Prewitt Corporation overstated accumulated depreciation by $20 million as of December 31, 2018. Prewitt has a tax rate of 30%. Prewitt's retained earnings as of December 31, 2018, would be:
A) Overstated by $14 million.
B) Understated by $14 million.
C) Overstated by $6 million.
D) Understated by $6 million.
Correct Answer:
Verified
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