In an inflationary period, which inventory cost flow method, FIFO or LIFO, is more desirable from a tax standpoint? Why?
What will be an ideal response?
The first-in, first-out (FIFO) cost flow method requires that the cost of the items purchased first be assigned to cost of goods sold. The last-in, first-out (LIFO) cost flow method requires that the cost of the items purchased last be charged to cost of goods sold. So, LIFO results in recognizing the lowest gross margin, lowest net income, and the lowest income tax expense.
You might also like to view...
Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs
Indicate whether the statement is true or false
A chronological organizational pattern for a résumé is appropriate when most of your work experience is related to your job objective
Indicate whether the statement is true or false
Wie Corp's sales last year were $280,000, and its year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. The firm's new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant? Do not round your intermediate calculations.
A. $238,333 B. $178,750 C. $259,783 D. $193,050 E. $250,250
Under what circumstances may the buyer seek the remedy of replevin?
A) Where the buyer has been able to effect cover B) Where the goods have been shipped under reservation of a security interest and the buyer has satisfied that interest C) Where the goods are specially manufactured but can be purchased from another source D) All of these are correct.