CBSC Cor reported its first two-year net income as $234,000 for 2018 and $176,000 for 2019. In Early 2020, CBSC discovered the errors:

2018 2019

Ending inventory $10,000 understatement $20,000 overstatement

Depreciation expense 16,000 overstatement 18,000 understatement

(ignore tax effects)

The journal entry to correct the above errors in the year 2020 includes:

Select one:

a. Credit Accumulated depreciation by $38,000

b. Credit inventory by $10,000

c. Debit Retained earnings by $22,000

d. Debit retained earnings by $12,000