Detailed Answer
Correct answer: (B)
$214,000.
Explanation: The insurance premiums of $30,000 were charged in error to insurance expense on the 2017 income statements. The premiums should have been allocated equally at $10,000 per year for 2017, 2018, and 2019. Therefore, the beginning retained earnings at 2018 are understated by $14,000—the effect of the error ($20,000) less the $6,000 tax effect ($20,000 × 30%). The corrected retained earnings would be the beginning balance plus the correction of the error ($200,000 + 14,000 = $214,000).