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At the end of the current year, a company overstated prepaid insurance by $78,000 and understated supplies expense by $106,000. Its effective tax rate is
| At the end of the current year, a company overstated prepaid insurance by $78,000 and understated supplies expense by $106,000. Its effective tax rate is 30%. As a result of this error, net income is: |
Understated by $19,600.
Understated by $128,800.
Overstated by $128,800.
Overstated by $19,600.
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