HH Company uses LIFO. HH disclosed that if FIFO had been used, inventory at the end of 2011 would have been $20 million lower than the difference between LIFO and FIFO at the end of 2010. Assuming HH has a 30% income tax rate:

A. Its reported cost of goods sold for 2011 would have been $20 million higher if it had used FIFO rather than LIFO for its financial statements.
B. Its reported cost of goods for 2011 would have been $14 million less if it had used FIFO rather than LIFO for its financial statements.
C. Its reported cost of goods sold for 2011 would have been $14 million higher if it had used FIFO rather than LIFO for its financial statements.
D. Its reported cost of goods for 2011 would have been $20 million less if it had used FIFO rather than LIFO for its financial statements.
Expert Answer

Amathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. thus, if mexico's real gdp per person is growing at 7 percent per year, it will take about 10 years(=70/7) to double. apply the rule of 70 to solve the following problem. real gdp per person in mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the u.s. if real gdp per person in mexico grows at the rate of 5 percent per year: how long will it take mexico's real gdp per person to reach the level that the united states was at in 2005? (hint: how many times would mexico's 2005 real gdp per person have to double to reach the u.s.'s 2005 real gdp per person?

The following pertains to smoke, inc.’s investment in debt securities: on december 31, year 3, smoke reclassified a security acquired during the year for $70,000. it had a $50,000 fair value when it was reclassified from trading to available-for-sale. an available-for-sale security costing $75,000, written down to $30,000 in year 2 because of an other-than-temporary impairment of fair value, had a $60,000 fair value on december 31, year 3. what is the net effect of the above items on smoke’s net income for the year ended december 31, year 3?

The basic difference between macroeconomics and microeconomics is that: a. microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). b. macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. c. microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets). d. macroeconomics is concerned with generalization while microeconomics is concerned with specialization.