Peter Companys December 31 year-end financial statements contained the following errors.

		December 31, 2017		December 31, 2018
Ending inventory		$132,000 overstated		$156,000 understated
Depreciation expense		$84,000 overstated

In addition, on December 31, 2018, fully depreciated machinery was sold for $28,800 cash, but the entry was not recorded until 2019. There were no other errors during 2017 or 2018, and no corrections have been made for any of the errors. (Ignore income tax considerations.)

Questions:

a.The total effect of the errors on Peter"s 2018 net income is?

b.The total effect of the errors on the balance of Peter's retained earning at December 31 2018 is understated by?