Nu Company reported the following pretax data for its first year of operations. Net sales 2,960...

Question

Question

Nu Company reported the following pretax data for its first year of operations.


Net sales	2,960
Cost of goods available for sale	2,430
Operating expenses	730
Effective tax rate	40	%
Ending inventories:
If LIFO is elected	970
If FIFO is elected	1,120

What is Nu's net income if it elects FIFO?

Answer 1

Answer #1

Cost of goods sold:

= $2,430 - $1,120

= $1,310

Net income:

= ($2,960 - $1,310 - $730) - 40%

= $552

Answer 2

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