Langley Company's December 31 year end financial statements contained the following error Dec. 31.2020 31. 2021 $55,000 overstated Finding inventory Depreciation expense $37,500 understated 10,000 understated An insurance premium of $90,000 was prepaid in 2020 covering the years 2020, 2021, and 2022. The prepayment was recorded with a debit to insurance expense. In addition, on December 31, 2021, fully deprecated machinery was sold for $47.500 cash, but the sale was not recorded until 2022 There were no other errors during 2021 or 2622 and no corrections have been made for any of the errors. Ignore income tax considerations. What is the total effect of the errors on the balance of Langley's retained earnings at December 31, 2017 Retained earnings understated by $12,500 O Retained earnings overstated by 517,500 Retained earnings understated by $60,000 O Retained eaming understated by $22,500