In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation.

	2021	2020	2019
Items not recognized:
Prepaid expenses	$1,300	$900	$550
Accrued expenses	950	700	800
Other information:
Reported net income	$23,000	$25,000	$20,000
Dividends declared and paid	4,100	2,600	5,000
Common stock and additional paid in capital at 12/31	22,000	17,000	15,000

Before corrections, indicate the error in 12/31/21 Retained Earnings

a.$350 understated

b.$350 overstated

c.$150 understated

d.$150 overstated

e.No error