Duck Company Has Valued Its Inventories at FIFO Cost for the Past

question 105

Multiple Choice

Duck Company has valued its inventories at FIFO cost for the past 10 years.The company would like to change to the LIFO method,effective in 2013.

• A) The election to change can be made with the 2013 tax return and the beginning inventory for 2013 will be the same as the FIFO inventory at the end of 2012 and no § 481 adjustment is required.
• B) The beginning inventory value for 2013 must be computed as though the company had been using LIFO in all prior years and a § 481 adjustment is required.
• C) The taxpayer must apply in 2012 for permission to change methods effective in 2013.
• D) Duck must amend all prior years' tax returns to compute income by the LIFO method.
• E) None of the above.

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Definitions:

Antibodies

Proteins produced by the immune system to neutralize or destroy foreign substances like bacteria and viruses.

Immune Function

The activities performed by the immune system to protect the body against disease-causing organisms and substances.

Antigens

Substances that the immune system recognizes as foreign or dangerous, eliciting an immune response, often found on pathogens or produced by them.

Leukocytes

White blood cells, part of the immune system, involved in protecting the body against both infectious disease and foreign invaders.