Armstrong Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/20 and 12/31/21 contained the following errors:

2020 2021

Ending inventory $50,000 overstatement $60,000 understatement

Depreciation expense 10,000 understatement 40,000 overstatement

Assume that no correcting entries were made at 12/31/20, or 12/31/21. Ignoring income taxes, by how much will retained earnings at 12/31/21 be overstated or understated?

		$80,000 understatement
		$70,000 understatement
		$100,000 overstatement
		$30,000 overstatement