Wilma Company Began Operations in 2010 and Uses the Average

question 31

Multiple Choice

Wilma Company began operations in 2010 and uses the average cost method in costing its inventory.In 2011, Wilma is investigating a change to the LIFO method.Before making that determination, Wilma desires to determine what effect such a change will have on net income.Wilma has compiled the following information: Assume a 40% tax rate.
If Wilma adopted LIFO in 2011, net income would be

• A)$ 80, 000
• B)$116, 000
• C)$170, 000
• D)$224, 000

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Definitions:

Economic Recession

An economic recession is a significant decline in economic activity across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Regulated Monopolies

Market situations in which local, state, or federal government grants exclusive rights in a certain market to a single firm.

Economic Recession

a period of temporary economic decline characterized by a decrease in GDP, income, employment, and trade, typically lasting from six months to a year.

Communism

Economic system in which all property would be shared equally by the people of a community under the direction of a strong central government.