This Year, Zulou Industries Capitalized $552,000 Indirect Costs to Inventory

question 87

Multiple Choice

This year, Zulou Industries capitalized $552,000 indirect costs to inventory for book purposes and $591,600 indirect cost to inventory under unicap. Zulou's cost of goods sold for book purposes was $2,458,000, and its cost of goods sold for tax purposes was $2,707,000. If Zulou has no other book/tax differences, and its book income is $5,000,000, compute Zulou's taxable income.

• A) $4,711,400
• B) $4,751,000
• C) $4,790,600
• D) $5,288,600

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Definitions:

Inka Times

The period during which the Inka (Inca) civilization flourished in South America, renowned for its architecture, road systems, and sophisticated society.

Haida Poles

Totem poles created by the Haida people of the Pacific Northwest, serving as representations of family lineage, myths, and events, richly carved and painted.

Totemic Emblems

Symbols or objects representing a totem, which is often an animal or other natural figure, believed to have spiritual significance to a group or clan.

Clan Groups

Social units comprising families or communities that share a common ancestry and culture, often found in tribal societies.