The Following Information Can Be Found in ABC Co Assume a Tax Rate of 35

question 5

Multiple Choice

The following information can be found in ABC Co.'s financial statements.
$\begin{array}{lrr}&\underline{ 2006}&\underline{ 2005}\\\text { Finished goods } & \$ 251,690 & \$ 195,360 \\\text { Work-in-process and } & & \\\text { purchased parts } & 245,123 & 186,432 \\\text { Raw materials } & 136,568 & 106,789 \\\text { Total FIFO value } & 633,381 & 488,581 \\\begin{array}{l}\text { Less excess of current } \\\text { cost over stated LIFO }\end{array} & & \\\text { value } &\underline{ 62,951}&\underline{71,186} \\\text { Inventories } & \$570,430&\$417,395\\\text { Retained earnings }&\$3,526,000&\$3,159,000\end{array}$
Assume a tax rate of 35%. Inventories valued using the LIFO method represented approximately 80% of consolidated inventories.
-What will be the retained earnings for 2006 if ABC used FIFO valuation?

• A)$3,205,271
• B)$3,566,918
• C)$3,893,000
• D)$4,096,430

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Definitions:

Problem-Focused

A coping strategy aimed at addressing the root cause of a stressor or problem, rather than just mitigating its symptoms.

Approach-Approach Conflict

A psychological conflict that occurs when a person needs to choose between two desirable options.

Emotion-Focused

A coping strategy where one attempts to reduce the emotional impact of a stressor by engaging in activities or thinking processes that lessen the emotional distress.

Coping Style

An individual's characteristic manner of dealing with stress or difficult situations, which can range from active problem-solving to avoidance.