Use the Following Information for Questions

Multiple Choice

Use the following information for questions.
Ernst Company purchased equipment that cost $750,000 on January 1, 2010.The entire cost was recorded as an expense.The equipment had a nine-year life and a $30,000 residual value.Ernst uses the straight-line method to account for depreciation expense.The error was discovered on December 10, 2012.Ernst is subject to a 40% tax rate.
-Ernst's net income for the year ended December 31, 2010, was understated by

A) $402,000.
B) $450,000.
C) $670,000.
D) $750,000.