Garraway Ski Company mistakenly recorded purchases of inventory on account received during the last week of December 2017 as purchases during January of 2018 (this is called a purchases cut-off error). Garraway uses a periodic inventory system, and ending inventory was correctly counted and reported each year. Assuming that no correction was made in 2017 or 2018, indicate whether each of the fallowing financial statement amounts will be understated, overstated, or correct:
1. Net earnings for 2017.
2. Net earnings for 2018.
3. Retained earnings at December 31, 2017.
4. Retained earnings at December 31, 2018.