In 2010,Swan Company Discovered That It Had for the Past

In 2010,Swan Company discovered that it had for the past 10 years capitalized as a production cost certain expenses that are properly classified as administrative expenses.The total amount of the expense for 2009 was $200,000,but $50,000 of the item was included in the ending inventory that year.

A) The company should amend its 2009 tax return and reduce its income by $150,000.
B) The company should change its accounting method in 2010,with a $200,000 positive § 481 adjustment which increases its 2010 taxable income.
C) The company should change its accounting method in 2010,and reduce its 2010 income by $50,000,the amount of the negative § 481 adjustment to income.
D) The company should change its accounting method in 2010 and recognize a $200,000 positive § 481 adjustment that will be spread over four years.
E) None of the above.