please describe the solution to this problem.

14. Accrued litigation liability of $327.000 were not recorded at December 31, 2019. This error got counter balanced when cash payment of $327.000 was made to in 2020 for settlement of a lawsuit. The error was never discovered or corrected. The effect of the error would cause 2019 net income to be understated $327,000 and 2020 net income to be overstated $327.000 2019. net income and December 31, 2019 retained earnings to be understated $327,000 cach December 31, 2019 retained earning to be overstated $327.000 and December 31, 2020 retained carings to be correct 2019 oul income to be overstated $327.000 and December 31, 2020 retained eaming to be understated 5327.000