Due to an error in computing depreciation expense,Prewitt Corporation overstated accumulated depreciation by $20 million as of December 31,2016.Prewitt has a tax rate of 30%.Prewitt's retained earnings as of December 31,2016,would be:
A)Overstated by $14 million.
B)Understated by $14 million.
C)Overstated by $6 million.
D)Understated by $6 million.

Question

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The Answer of Due to an error in computing depreciation expense,Prewitt Corporation overstated accumulated depreciation by $20 million as of December 31,2016.Prewitt has a tax rate of 30%.Prewitt's retained earnings as of December 31,2016,would be:
A)Overstated by $14 million.
B)Understated by $14 million.
C)Overstated by $6 million.
D)Understated by $6 million.

Due to an Error in Computing Depreciation Expense,Prewitt Corporation Overstated