Happy House Corporation Reported Net Sales of $425,000 for the Current

question 28

Multiple Choice

Happy House Corporation reported net sales of $425,000 for the current year. After the financial statements had been prepared, it was discovered that ending inventory had been understated by $25,000. If the tax rate is 40%, after the error has been corrected, net income will:

• A)decrease by $25,000.
• B)increase by $15,000.
• C)decrease by $15,000.
• D)increase by $25,000.

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