HH Company Uses LIFO

question 74

Multiple Choice

HH Company uses LIFO.HH disclosed that if FIFO had been used,inventory at the end of 2016 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2015.Assuming HH has a 30% income tax rate:

• A)Its reported cost of goods for 2016 would have been $14 million less if it had used FIFO rather than LIFO for its financial statements.
• B)Its reported cost of goods for 2016 would have been $20 million less if it had used FIFO rather than LIFO for its financial statements.
• C)Its reported cost of goods sold for 2016 would have been $14 million higher if it had used FIFO rather than LIFO for its financial statements.
• D)Its reported cost of goods sold for 2016 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.

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Definitions:

Social Controls

Mechanisms, both formal and informal, that regulate individual and group behavior, aiming to enforce conformity to societal norms.

Conformity

The act of aligning one's beliefs, attitudes, or behaviors with those of a group or societal norms, often to fit in or be accepted.

Imprisonment Rate

A statistical measure representing the number of individuals incarcerated per 100,000 population within a specific jurisdiction.

African-American Men

Male individuals who are of African descent and are citizens or residents of the United States.