REFERENCE: Ref.08_10 Baker Corporation Changed from the LIFO Method to the FIFO

question 60

Multiple Choice

REFERENCE: Ref.08_10
Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2008.Baker has an effective income tax rate of 30 percent and 100,000 shares of common stock issued and outstanding.The following additional information is available:

-Assuming Baker makes the change in the first quarter of 2008,how much is reported as net income for the first quarter of 2007?

• A)$300,000.
• B)$322,750.
• C)$335,000.
• D)$265,000.
• E)$277,250.

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Definitions:

Pleasure Principle

A psychoanalytic concept proposed by Freud that suggests individuals seek pleasure and avoid pain to satisfy biological and psychological needs.

Reality Principle

A mechanism functioning within the conscious and unconscious that weighs the costs and benefits of an action before deciding to act.

Ego

In the realm of psychoanalytic theory, this refers to the aspect of one's personality that balances the desires of the id, the moral guidelines of the superego, and the practicalities of the real world.

Electra Complex

A psychoanalytic theory proposing a girl's psychosexual competition with her mother for possession of her father.