Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $78 million as of December 31, 2016. Crote has a tax rate of 35%. Crote's retained earnings as of December 31, 2016, would be (Round million answer to 2 decimal places.):
Overstated by $50.70 million.
Understated by $50.70 million.
Understated by $78.00 million.
Overstated by $78.00 million.