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 Earningsis in error by:

Select one:

a.No error

b.$18,000

c.$12,000

d.$29,000

e.$21,000