White Corporation Uses the FIFO Method for Internal Reporting Purposes

question 39

Multiple Choice

White Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2014 was $160,000. The balance in the same account at the end of 2015 is $240,000. White's Cost of Goods Sold account has a balance of $1,200,000 from sales transactions recorded during the year. What amount should White report as Cost of Goods Sold in the 2015 income statement?

• A) $1,120,000.
• B) $1,200,000.
• C) $1,280,000.
• D) $1,440,000.

Apply concepts related to cash flow from operating activities.

Analyze cash flows from investing activities.

Determine cash flows from financing activities.

Calculate and interpret cash collected from customers and cash paid to suppliers.

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Definitions:

Reduction In Income Inequality

Refers to efforts or policies aimed at decreasing the disparity in income distribution among a population, thereby promoting economic fairness.

Transfer Payments

Payments made by the government to individuals or other entities without receiving any goods or services in return, such as welfare benefits or social security.

Earned-Income Tax Credits

A refundable tax credit for low- to moderate-income working individuals and families, particularly those with children, aimed at reducing poverty and encouraging work.

Unequal Distribution Of Income

A situation where income is not distributed evenly among the population, leading to disparities in wealth and living standards.