HH Company Uses LIFO

question 179

Multiple Choice

HH Company uses LIFO. HH disclosed that if FIFO had been used, inventory at the end of 2018 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2017. Assuming HH has a 30% income tax rate:

• A) Its reported cost of goods for 2018 would have been $14 million less if it had used FIFO rather than LIFO for its financial statements.
• B) Its reported cost of goods for 2018 would have been $20 million less if it had used FIFO rather than LIFO for its financial statements.
• C) Its reported cost of goods sold for 2018 would have been $14 million higher if it had used FIFO rather than LIFO for its financial statements.
• D) Its reported cost of goods sold for 2018 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.

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Definitions:

Status Construction

The process through which social hierarchies and positions are created and maintained within societies.

Imposter Phenomenon

A psychological pattern in which an individual doubts their accomplishments and has a persistent internalized fear of being exposed as a "fraud."

Equity

When people receive rewards in proportion to the contributions they make toward the attainment of group goals.

Generalized Exchange

A type of social interchange where goods or services are provided to one member of a group without the expectation of a direct reciprocal action from the receiver.