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

question 13

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 2018.

• A)The election to change can be made with the 2018 tax return and the beginning inventory for 2018 will be the same as the FIFO inventory at the end of 2017 and no § 481 adjustment is required.
• B)The beginning inventory value for 2018 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 2017 for permission to change methods effective in 2018.
• 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:

Maximum Positive Voltage

The highest voltage level in the positive direction that a system or component is designed to handle.

Magnetic North Polarity

The direction in which the north end of a magnet points, aligning with the Earth's magnetic north.

Magnetic Flux

The measure of the quantity of magnetism, considering the strength and the extent of a magnetic field.

Electro-Magnets

Electro-magnets are devices that create a magnetic field through the flow of electric current, typically consisting of a wire coil wrapped around a magnetic core, and are used in various applications including motors and relays.