Hagen Company is preparing its 2017 annual report.Hagen Company presents one year of financial information on all financial statements.Hagen has had a corporate tax rate of 30% since its inception in 2015.The company's accountant calculated income from continuing operations (after tax) to be $1,000,000 for 2017, but upon further review is not certain this number is accurate.All amounts listed are pretax unless otherwise noted.

1)Hagen has decided to change from LIFO to FIFO inventory.The following data shows Cost of Goods Sold for each year of operation, under both LIFO and FIFO.Hagen's 2017 income of $1,000,000 was calculated using LIFO.

Year COGS under LIFO COGS under FIFO

2015 $480,000 $460,000

2016 $510,000 $470,000

2017 $630,000 $540,000

2015:Income understated by 14,000 net of 6,000 tax

2016:Income understated by 28,000 net of 12,000 taxR.E. restatement of $42,000 net of $18,000 tax

2017:Income understated by 63,000 net of 27,000 taxNI adjusted up.

The red is the answer but I don't understand how they got that