Henri Company's Inventory Records Show the Following Data A Physical Inventory on December 31 Shows 3000 Units on l

question 148

Multiple Choice

Henri Company's inventory records show the following data: $$\begin{array} { l r r } & \underline { \text { Units } } &\underline { \text { Unit Cost } }\\\text { Inventory, January 1 } & 10,000 & \$ 9.20 \\\text { Purchases: June 18 } & 9,000 & 8.00 \\\text { November 8 } & 6,000 & 7.25\end{array}$$
A physical inventory on December 31 shows 3000 units on hand. Henri sells the units for $12 each. The company has an effective tax rate of 20%. Henri uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used?

• A) $1170 additional taxes
• B) $630 additional taxes
• C) $1290 additional taxes
• D) $630 tax savings

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