Question: Powell Company had the following errors over the last two years: 2009: Ending inventory was overstated by $30,000 while depreciation expense was overstated by $14,000.

Powell Company had the following errors over the last two years: 2009: Ending inventory was overstated by $30,000 while depreciation expense was overstated by $14,000. 2010: Ending inventory was understated by $5,000 while depreciation expense was understated by $4,000. By how much should retained earnings be adjusted on January 1, 2011? (Ignore taxes)

Group of answer choices

Decrease by $6,000.

None is correct.

Decrease by $25,000.

Increase by $15,000.

Increase by $25,000.

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