1. At a company, events and transactions during 2014 included the following. The tax rate for all items is 30%.
(1) Depreciation for 2012 was found to be understated by $90,000.
(2) A strike by the employees of a supplier resulted in a loss of $75,000.
(3) The inventory at December 31, 2012 was overstated by $120,000.
(4) A flood destroyed a building that had a book value of $1,500,000. Because floods are very uncommon in this geographical area, management characterized this flood loss as extraordinary.
Calculate the effect of these events and transactions on 2014 income from continuing operations net of tax. Display your work in detail.