In July 2021, Profilo Corporation, which was founded in 2019, discovered that its ending inventories reported on its financial statements were misstated by the following amounts:

2019: understated by $120,000, 2020: overstated by $50,000.

Profilo uses the periodic inventory system and the FIFO cost method. Tax rate is 25%. The journal entry to correct the error in July 2021?

a.	Credit to Deferred Tax Liability by $12,500
	b.	Credit to Retained Earnings by $37,500
	c.	Debit to Deferred Tax Assets by $12,500
	d.	No correction should be made in July 2021
	e.	Debit to inventory by $50,000