Determine underlying earnings by adjusting the income statement below for non-recurring items and accounting changes. Assume a tax rate of 40 percent.

Net sales	$11,900
Expenses:
Cost of products sold	$3,525
Marketing, selling, and administrative	3,075
Advertising and product promotions	1,425
Research and development	1,080
Provision for restructuring	700
Other	(30)
Total costs and expenses	$9,775
Earnings before continuous operations before income taxes	$2,125
Provision for income taxes	850
Earnings from continuous operations	$1,275
Discontinued operations:
Earnings (net)	$30
Gain on disposal (net)	590
Discontinued operations-total	$620
Earnings before cumulative effect of accounting change	$1,895
Cumulative effect of accounting change (net)	(300)
Net income (loss)	$1,595

Question 1 options:

	A -$1,555
	B -$1,095
	C -$1,695
	D- $1,975