The Accountant at Almira Company Is Figuring Out the Difference

question 33

Multiple Choice

The accountant at Almira Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method.The tax rate is 30% and the FIFO method will result in income before taxes of $8,190.The LIFO method will result in income before taxes of $7,290.What is the difference in tax that would be paid between the two methods?

• A)$270.
• B)$630.
• C)$900.
• D)Cannot be determined from the information provided.

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Definitions:

Demand Shock

A sudden event that significantly alters demand for goods or services, either positively or negatively, in an economy.

Supply Shock

An unexpected event that suddenly changes the supply of a product or commodity, leading to sudden price changes and/or shifts in the market.

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The rate at which one can exchange US dollars for Japanese yen, indicating the value of one currency in terms of the other.

Japanese Producer

A Japanese Producer refers to a company or individual involved in the manufacturing or production sector within Japan, known for its automotive, electronics, and technology industries.