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

question 83

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 2008?

• A)$492,000.
• B)$494,800.
• C)$500,000.
• D)$505,200.
• E)$527,950.

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Definitions:

Supply

The total quantity of a good or service that the market can offer.

Demand

The amount of a product or service that consumers are willing and able to purchase at various prices during a specified period.

Equilibrium

A situation where the amount of goods available in the market matches what consumers want to buy, leading to stable prices and consistent availability.

Excess Supply

A situation where the quantity of goods or services supplied is greater than the quantity demanded at a given price.