Ernst Company purchased equipment that cost $3,000,000 on January 1, 2016. The entire cost was recorded as an expense. The equipment had a nine-year life and a $ 120,000 resdual value. Ernst uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2019 before making year-end adjusting entries. Ernst is subject to a 35% tax rate. Befo re the correction was made and before the books were closed on December 31, 2019, retained earnings was understated by Seleot one: Oa. $1.326,000. b. $1.416,000 o. $1,800,000. d. $1,344,000 Next Page re to search