Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors:

	2024	2025
Ending inventory	$15,000 understatement	$24,000 overstatement
Depreciation expense	6,000 understatement	12,000 understatement

• Failed to record Unearned Revenue at 12/31/25: $7,000
• Straightarm declared a cash dividend of $11,000 on 12/31/25. No journal entry was made in 2025. The dividend was paid on 1/3/26; Straightarm debited Retained Earnings and credited Cash.

12/31/26 Retained Earnings is in error by:

Select one:

a. No error

b. $18,000

c. $12,000

d. $29,000

e. $21,000