Handy Company Purchased Equipment That Cost $750,000 on January 1

Handy Company purchased equipment that cost $750,000 on January 1, 2006. The entire cost was recorded as an expense. The equipment had a nine-year life and a $30,000 residual value. Handy uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2008. Handy is subject to a 40% tax rate.
-Handy's net income for the year ended December 31, 2006, was understated by

A) $402,000.
B) $450,000.
C) $670,000.
D) $750,000.