in periods when cost are rising, LIFO liquidations: 1. can't occur 2. are used to reduce...
in periods when cost are rising, LIFO liquidations: 1. can't occur 2. are used to reduce tax liabilities 3. are a source of off-balancing-sheet financing 4. distort the net income
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in periods when cost are rising, LIFO liquidations: 1. can't
occur 2. are used to reduce...
In periods when costs are rising, LIFO liquidations: A. Can’t occur. B. Are used to reduce...
In periods when costs are rising, LIFO liquidations: A. Can’t occur. B. Are used to reduce tax liabilities. C. Are a source of off-balance-sheet financing. D. Distort the net income.
Which one of the following is an advantage of LIFO? In periods of rising prices, more...
Which one of the following is an advantage of LIFO? In periods of rising prices, more holding gains are reported in net income. In periods of rising prices, less income tax is paid. Record keeping and financial statement preparation are easier. Conservative income statements and balance sheet disclosures result from falling prices.
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling...
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling L07-2,7-3 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 500 units for $15,000: beginning inventory, 300 units purchases. 400...
Comparing Inventory Methods Assume that a firm separately determined inventory under FIFO and LIFO and then...
Comparing Inventory Methods Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. a. In each dropdown that follows, select the correct sign [less than (<), greater than (>), or equal (=)] for each comparison, assuming periods of rising prices. 1. FIFO inventory LIFO inventory 2. FIFO cost of merchandise sold LIFO cost of merchandise soldd 3. FIFO net income LIFO net income 4. FIFO income taxes LIFO income taxes b. Why would management...
QUESTION 16 16. What happens when prices are rising? A. LIFO will result in lower net...
QUESTION 16 16. What happens when prices are rising? A. LIFO will result in lower net income and a lower inventory valuation than will FIFO. B.LIFO will result in lower net income and a higher inventory valuation than will FIFO. C. LIFO will result in higher net income and a higher inventory valuation than will FIFO. D. LIFO will result in higher net income and a lower inventory valuation than will FIFO. QUESTION 17 Rowan Company has four different categories...
1. As the corporation considers whether to continue using LIFO in future periods or switch to...
1. As the corporation considers whether to continue using LIFO in future periods or switch to FIFO, what factories should be considered? Are there one or two single compelling reasons why they should choose either of the options? 2. If they were to change to FIFO - how will that impact the balance sheer and income statement? 3. Let's say that we experienced an increased level of inflation in future period's with price rising more quickly than average. How would...
31. When using a perpetual inventory system, a. no Purchases account is used. b. a Cost...
31. When using a perpetual inventory system, a. no Purchases account is used. b. a Cost of Goods Sold account is used. c. two entries are required to record a sale. d) All of these answer choices are correct sold for 2017, net income for 2017, and assets at December 31, 2018, respectively, are a. overstatement, understatement, overstatement. 32. If the beginning inventory for 2017 is overstated, the effects of this error on cost of goods overstatement, understatement, no effect....
in a period of rising prices, which of the following inventory methods results in the lowest...
in a period of rising prices, which of the following inventory methods results in the lowest net income? 1. Specific identification method 2. FIFO 3. LIFO 4. Weighted average cost Explain the answer in detail.
+ 23. Nicholas Industries had the following inventory transactions occur during 2014: 22 Units Cost/unit 2/1/16...
+ 23. Nicholas Industries had the following inventory transactions occur during 2014: 22 Units Cost/unit 2/1/16 Purchase 54 $45 3/14/16 Purchase 93 $47 5/1/16 Purchase 66 $49 The company sold 140 units at $65 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using LIFO? (rounded to whole dollars)
Marigold Industries had the following inventory transactions occur during 2018: Units Cost/unit 2/1/18 Purchase 60 $40...
Marigold Industries had the following inventory transactions occur during 2018: Units Cost/unit 2/1/18 Purchase 60 $40 3/14/18 Purchase 96 $45 5/1/18 Purchase 60 $46 The company sold 156 units at $80 each and has a tax rate of 20%. Assuming that a periodic inventory system is used, what is the company’s after-tax income using LIFO? (rounded to whole dollars)
Which one of the following is an advantage of LIFO? In periods of rising prices, more holding gains are reported in net income. In periods of rising prices, less income tax is paid. Record keeping and financial statement preparation are easier. Conservative income statements and balance sheet disclosures result from falling prices.
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling L07-2,7-3 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 500 units for $15,000: beginning inventory, 300 units purchases. 400...
QUESTION 16 16. What happens when prices are rising? A. LIFO will result in lower net income and a lower inventory valuation than will FIFO. B.LIFO will result in lower net income and a higher inventory valuation than will FIFO. C. LIFO will result in higher net income and a higher inventory valuation than will FIFO. D. LIFO will result in higher net income and a lower inventory valuation than will FIFO. QUESTION 17 Rowan Company has four different categories...
31. When using a perpetual inventory system, a. no Purchases account is used. b. a Cost of Goods Sold account is used. c. two entries are required to record a sale. d) All of these answer choices are correct sold for 2017, net income for 2017, and assets at December 31, 2018, respectively, are a. overstatement, understatement, overstatement. 32. If the beginning inventory for 2017 is overstated, the effects of this error on cost of goods overstatement, understatement, no effect....
+ 23. Nicholas Industries had the following inventory transactions occur during 2014: 22 Units Cost/unit 2/1/16 Purchase 54 $45 3/14/16 Purchase 93 $47 5/1/16 Purchase 66 $49 The company sold 140 units at $65 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using LIFO? (rounded to whole dollars)
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