Having problems with this question below, thank you for the assist!

--- Berkshire INC uses periodic inventory system. At the end of 2015, it missed counting some inventory items, resulting in an inventory understatement by 600,000. Assume that Berkshire has the 30% income tax rate that this was the only error it made.

What is the effect of the error on Berkshires 2016 income statement?

a. Cost of goods sold is understated by 420,000.

b. Net Income is understated by $420,000.

c. There are no errors in the 2016 income statement.

d. None of these choices are correct.

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In the first year of an assets life, which of the following methods has the smallest depreciation?

A. Sum of the years digits

B. Straight-Line

C. Composite Group.

D. Declining balance

Recent financial statement data for Harmony Health Foods (HHF) Inc. is shown below.

Current liabilities	$ 180	Income before interest and taxes	$ 125
10% Bonds, long-term	360	Interest expense	36
Total liabilities	540	Income before tax	89
Shareholders' equity		Income tax	27
Capital stock	200	Net income	$ 62
Retained earnings	280
Total shareholders' equity	480
Total liabilities and equity	$1,020

HHF's long-term debt to equity ratio equity is:

a. 133.3%.

b. 75%.

c. 180%.

d. 0%.