Use the Following Information for Questions

question 18

Multiple Choice

Use the following information for questions.
Fairfax Inc.began operations on January 1, 2016.Financial statements for 2016 and 2017 contained the following errors: In addition, on December 31, 2017 fully depreciated equipment was sold for $7,200, but the sale was NOT recorded until 2018.No corrections have been made for any of the errors.Ignore income tax considerations.
-The total effect of the errors on Fairfax's retained earnings at December 31, 2017 is that the balance is understated by

• A)$82,200.
• B)$67,200.
• C)$46,200.
• D)$34,200.