Pretax income includes the gain in either location. It is not overstated when the gain is counted once.
Gross profit and operating income both include customer revenue, so moving the gain there also changes those subtotals.
The gain wrongly enters revenue, so it raises gross profit and operating income. Moving it within the same statement does not change pretax income when counted once.
Operating income begins with gross profit, so the misplaced gain also raises operating income when no later correction is made.
Answer: c
Gross profit and operating income are each overstated by $25 thousand. Pretax income is unchanged because the gain remains included once.