Question: Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $7million as of December 31, 2016. Crote has a tax rate

Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $7million as of December 31, 2016. Crote has a tax rate of 20%. Crote's retained earnings as of December 31, 2016, would be (Round million answer to 2 decimal places.):

Overstated by $5.60 million.

Understated by $5.60 million.

Understated by $1.4 million.

Overstated by $1.4 million.

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