DXY, Inc. provides its employees with a defined benefit pension plan. In 2020, after negotiation with the employees, the company agreed to retroactively modify the plan in favor of the employees. In 2021, the company did not amortize the cost of services from previous periods (PSC). Which of the following statements is correct regarding the effect of this error on the 2021 financial statements?

a. The ending balance of retained earnings is overstated.

b. The final equity balance is correct.

c. The pension expense is overestimated.

d. Basic earnings per share is underestimated