Baker Corporation Changed from the LIFO Method to the FIFO

question 60

Multiple Choice

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2011. 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 2011, how much is reported as net income for the first quarter of 2011?

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

---

Definitions:

China

A country in East Asia, the world's most populous nation, with a long history, rich culture, and significant economic influence.

U.S.

Refers to the United States of America, a country in North America known for its significant influence on global politics, economy, and culture.

Home Equity Loans

Loans provided to homeowners based on the difference between the market value of their home and the outstanding balance of all liens on the property.

Japanese Savings Rate

The Japanese Savings Rate is the proportion of disposable income that is saved by households in Japan, historically known for being high.