CVS uses the periodic inventory system to ascertain year$-$end quantities that are converted to dollar amounts using the weighted$-$average cost method. Prior to any adjustments for these errors and ignoring income taxes, CVS$\text{'}$ Retained Earnings on January $1,2024,$ would be:

$$6,826,000$ overstated.

$$1,378,000$ overstated.

$$1,378,000$ understated.

$$6,826,000$ understated.