Evelyn Company purchased equipment that cost $150,000 on January 1, 2011. The entire cost was recorded as an expense. The equipment had a nine-year life and a $6,000 residual value. Evelyn uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2011. Evelyn is subject to a 40% tax rate.

Evelyn's net income for the year ended December 31, 2009, was understated by

a. $80,400. b. $90,000. c. $134,000. d. $150,000