12. At Ruth Company, events and transactions during 2014 included the following. The tax rate for all items is 30%. (1) Depreciation for 2012 was found to be understated by $90,000. (2) A strike by the employees of a supplier resulted in a loss of $75,000. (3) The inventory at December 31, 2012 was overstated by $120,000. (4) A flood destroyed a building that had a book value of $1,500,000. Floods are very uncommon in that area. The effect of these events and transactions on 2014 income from continuing operations net of tax would be A. ($52,500 B. ($115,500).

C. ($199,500).