Business, 07.04.2020 22:33 ehhshsh

Carolina Company uses the LIFO method for valuing its ending inventory. The following financial statement information is available for its first year of operation:

Carolina Company

Income Statement

For the year ended December 31

Sales 60,000

Cost of Goods sold 23,000

Gross Profit 37,000

Expenses 13,000

Income before taxes $ 24,000

Carolina's ending inventory using the LIFO method was $8,700. Carolina's accountant determined that had the company used FIFO, the ending inventory would have been $9,100.

a. Determine what the income before taxes would have been, had Carolina used the FIFO method of inventory valuation instead of LIFO.

b. What would be the difference in income taxes between LIFO and FIFO, assuming a 30% tax rate?

c. If Carolina wanted to lower the amount of income taxes to be paid, which method would it choose?

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 13:30

After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of schenkel enterprises. unfortunately, you will be the only person voting for you. the company has 375,000 shares outstanding, and the stock currently sells for $40, if there are four seats in the current election, how much will it cost you to buy a seat?

Answers: 2

Answer

Business, 22.06.2019 14:20

Anew 2-lane road is needed in a part of town that is growing. at some point the road will need 4 lanes to handle the anticipated traffic. if the city's optimistic estimate of growth is used, the expansion will be needed in 4 years and has a probability of happening of 40%. for the most likely and pessimistic estimates, the expansion will be needed in 8 and 15 years respectively. the probability of the pessimistic estimate happening is 20%. the expansion will cost $ 4.2 million and the interest rate is 8%. what is the expected pw the expansion will cost?

Answers: 1

Answer

Business, 22.06.2019 18:00

When peter metcalf describes black diamond’s manufacturing facility in china as a “greenfield project,” he means that partnered with a chinese company to buy the plant . of all market entry strategies, this one carries the lowest risk. because black diamond manufactures its outdoor sports products outside the united states, what risks must its managers be aware of?

Answers: 1

Answer

Business, 22.06.2019 20:00

Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact thatmr=mc at the optimal quantity for each firm. furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium isless than the minimum average total cost. true or false: this indicates that there is a markup on marginal cost in the market for engines. true false monopolistic competition may also be socially inefficient because there are too many or too few firms in the market. the presence of the externality implies that there is too little entry of new firms in the market.

Answers: 3

Answer

You know the right answer?

Carolina Company uses the LIFO method for valuing its ending inventory. The following financial stat...

Questions