Answer:
Overstatement of $34.020
Explanation:
A reduction in accumulated depreciation means the corresponding debit in income statement was also understated ,hence expenses were understated leading to overstated taxable income which would mean that retained earning was overstated
Deferred tax liability=$48,600*30%=$14,580
The correct retained earnings should have been lower by $14,580
Overstatement in retained earnings =$48,600-$14,580=$34,020
