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

question 52

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 and that $400,000 net income is earned during the second quarter,how much is reported as net income for the second quarter of 2008?

• A)$400,000.
• B)$405,200.
• C)$427,950.
• D)$894,850.
• E)$905,200.

---

Definitions:

Personal Contact

involves direct interaction between individuals, usually face-to-face, for communication or relationship building.

Distress

Extreme anxiety, sorrow, or pain that negatively impacts an individual's mental and physical well-being.

Uberstress

An extreme or overwhelming level of stress that can negatively impact one's health and well-being.

Stressors

External events or circumstances that may cause physical, emotional, or psychological strain or tension.