The Following Inventory Valuation Errors Were Discovered by Knox Corporation's $\$ 17,000$

Multiple Choice

The following inventory valuation errors were discovered by Knox Corporation's new controller just after the annual financial statements were published at the end of Year 3.
The Year 3 ending inventory was understated by $\$ 17,000$ .
The Year 2 ending inventory was understated by $\$ 61,000$ .
The Year 1 ending inventory was overstated by $\$ 23,000$ .
The net income for Knox in each of these years was:
$\text { Net income } \quad \frac { \text { Year } 3 } { \$ 168,000 } \quad \frac { \text { Year } 2 } { \$ 254,000 } \quad \frac { \text { Year 1 } } { \$ 138,000 }$
Assuming there were no income taxes, what was the adjusted net income in each year?
$\begin{array}{rrrr}\text { Year 3} & \text { Year } 2 & \text { Year } 1 \\A.\$ 212,000 & \$ 170,000 & \$ 161,000 \\B.\$ 124,000 & \$ 338,000 & \$ 115,000 \\C. \$ 90,000 & \$ 338,000 & \$ 161,000 \\D. \$ 124,000 & \$ 170,000 & \$ 115,000\end{array}$

A) Option A
B) Option B
C) Option C
D) Option D