HH Company Uses LIFO

question 96

Multiple Choice

HH Company uses LIFO. HH disclosed that if FIFO had been used, inventory at the end of 2013 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2012. Assuming HH has a 30% income tax rate:

• A)Its reported cost of goods for 2013 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 2013 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 2013 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 2013 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.

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Definitions:

Project Management

The practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria.

Contingency Plans

Preparatory measures or strategies developed to address potential future events or situations that may affect the execution of a plan or project.

Additional Time

Extra time allocated beyond the originally planned or scheduled duration, often to complete a task or accommodate unforeseen delays.

Starting Phase

The initial period or stage of a process or activity during which things are set in motion.