The Tricia Co Assuming That No Correcting Entries Were Made, by How Much

The Tricia Co.presented financial statements for 2010 and 2011 that contained the following errors: $\begin{array}{lll}&2011&2010\\\text { Ending merchandise inventory } & \$ 700 \text { understated } & \$ 400 \text { overstated } \\\text { Supplies expense } & 500 \text { understated } & 100 \text { overstated }\end{array}$ Assuming that no correcting entries were made, by how much would retained earnings be understated at January 1, 2012?

A) $1, 200
B) $1, 100
C) $ 800
D) $ 700

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