Nu Company reported the following pretax data for its first year of operations. Net sales 2,800
Cost of goods available for sale 2,500
Operating expenses 880
Effective tax rate 40%
Ending inventories:
If LIFO is elected 820
If FIFO is elected 1,060
What is Nu's net income if it elects LIFO?
A. $288
B. $144
C. $480
D. $240

b.$144

Explanation:

Calculation for Nu's net income if it elects LIFO

Net sales$2,800

Less Cost of goods sold ($1,680)

($2,500 - 820)

Gross profit $1,120

($2,800-$1,680)

Less Operating expenses ($880)

Income before taxes$240

($1,120-$880)

Less Income tax ($96)

($240 x 40%)

Net income$ 144

($240-$96)

Therefore Nu's net income if it elects LIFO will be $144

answer: b) the us is the leading importer but not the leading exporter.

extra info:

the u.s is the largest importer but it is not the largest exporter as china sits on the top of the table when it comes to leading exporters.

but u.s is not far from first,

they rank in 2nd globally as the worlds largest exporter.

happy to

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