At Hall Company, Events and Transactions During 2008 Included the Following

Multiple Choice

At Hall Company, events and transactions during 2008 included the following. The tax rate for all items is 30%.
(1) Depreciation for 2006 was found to be understated by $30,000.
(2) A strike by the employees of a supplier resulted in a loss of $25,000.
(3) The inventory at December 31, 2006 was overstated by $40,000.
(4) A flood destroyed a building that had a book value of $500,000. Floods are very uncommon in that area.
-The effect of these events and transactions on 2008 net income net of tax would be

A) $17,500.
B) $367,500.
C) $388,500.
D) $416,500.