Ancelotti, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and 2010 contained errors as follows: 1) Ending Inventory for 2011 is overstated by $3,000

2) Ending Inventory for 2010 is overstated by $8,000

3) Salaries expense for 2011 is understated by $2,000

4) Salaries expense for 2010 is overstated by $6,000 No correcting entries were made at December 31, 2010. Assuming no taxes, by how much will retained earnings at December 31, 2011 be overstated or understated? a. $1,000 understated b. $5,000 overstated c. $5,000 understated d. $9,000 understated

The answer is a. $1,000 but I need an explanation because I do not know how to solve this question, thanks.