On December 31, 2019, Krug Company prepared adjusting entries that included the following items: Depreciation expense: $30,000. Accrued sales revenue: $28,000. Accrued expenses: $20,000. Used insurance: $8,000; the insurance was initially recorded as prepaid. Rent revenue earned: $6,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue. If Krug Company reported pretax income of $220,000 prior to the adjusting entries, how much is Krug's pretax income after the adjusting entries?

Multiple Choice $204,000. $220,000. $198,000. $196,000.