ANTOKS Company reported that the year-end financial statements contained the following errors:

	2016	2017
Ending inventory	200,000 understated	300,000 overstated
Depreciation	50,000 understated

An insurance premium of P150,000 was prepaid in 2016 to cover 2016, 2017, and 2018. The entire amount was charged to expense in 2016. On December 31, 2017, fully depreciated machinery was sold for P250,000 cash but the sale was not recorded until 2018.

There were no other errors during 2016 and 2017 and no corrections have been made for any of the errors.

1. What is the pre-tax net effect of the above errors on retained earnings on December 31, 2017? A. 300,000 overstated B. 250,000 understated C. 50,000 overstated D. 50,000 understated

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