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.

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Definitions:

Obsessive-Compulsive Disorder

A mental health disorder characterized by recurrent, unwanted thoughts (obsessions) and/or repetitive behaviors (compulsions) which the person feels driven to perform.

DSM-5

The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, a comprehensive classification system for mental disorders used by healthcare professionals.

Obsessions

Persistent, unwanted thoughts, images, or impulses that cause distress or anxiety, often a feature of obsessive-compulsive disorder (OCD).

Compulsions

Repetitive behaviors or mental acts that an individual feels driven to perform in response to an obsession, often aimed at reducing distress or preventing feared events.