During 2017, Rand Inc. discovered that the ending inventories reported

on its financial statements were incorrect by the following amounts:
2016: $40,000 understated
2017 : $50,000 overstated
Rand uses the periodic inventory system to ascertain year-end quantities that are converted to dollar amounts using the FIFO cost method. Assume that there weren’t any adjustments made for the 2016 understatement and the 2017 overstate, ignoring income taxes, what would be the amount of the overstatement or understatement in retained earnings at January 1, 2018? Assume the only type of transaction involving retained earnings was net income; there were no dividends paid in 2016 and 2017.