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Nonamiya [84]
3 years ago
9

A physical inventory on December 31 shows 3,000 units on hand. Henri sells the units for $12 each. The company has an effective

tax rate of 20%. Henri uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used?
Business
1 answer:
bekas [8.4K]3 years ago
3 0

Answer:

Lifo in inflationary- condition Income tax shows minimum amount, when there is inflation in the economy.

Fifo In inflationary condition, income tax shows a higher amount.

Lifo .in deflation .In case of deflation, larger amount of income tax is shown. Fifo  in deflation .Reduced income tax will be shown in deflationary conditions

Explanation:

Lifo in inflationary- condition Income tax shows minimum amount, when there is inflation in the economy.

Fifo In inflationary condition, income tax shows a higher amount.

Lifo .in deflation .In case of deflation, larger amount of income tax is shown. Fifo  in deflation .Reduced income tax will be shown in deflationary conditions.

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Cost behavior is useful to managers for all of the following except:__________.
Nina [5.8K]

Answer:

D

Explanation:

Cost behavior is defined as the measure of the reaction of the cost to outputs in production and sales volume.It reveals the impact of changes in activities on cost.

This helps the management in planning and controlling its costs and drive profits.

Cost behavior can be useful to the manager in deciding whether to replace a machine or not as the efficiency rate of a machine tends to reduce due to impairment , causing a rise in cost.

So also , it can be useful in predicting profits as sales and production volume changes and also to estimate cost.

5 0
3 years ago
Noah graduated with his B.A. in early childhood education in December, but public schools are not hiring until spring.
sashaice [31]

Answer:

Job #1

Explanation:

Job #1 is best suited according to Noah's preference. She wants to work near home, have experience working with children and provide educational opportunities. The Job #1 offers her para- educator in kindergarten class. This job is close to her home and has positive school culture. This job provides her opportunity for networking with administrators and the pay is also good. Therefore Noah should select job #1.

7 0
3 years ago
Swifty Corporation issued 100000 shares of $10 par common stock for $1250000. A year later Swifty acquired 15900 shares of its o
Drupady [299]

Answer:

the journal entries should be:

Dr Cash 1,250,000

    Cr Common stock 1,000,000

    Cr Additional paid in capital 250,000

Dr Treasury stock 238,500

    Cr Cash 238,500

Dr Cash 161,500

    Cr Common stock 85,000

    Cr Additional paid in capital 76,500

4 0
3 years ago
What is the economic problem
Greeley [361]

Answer:

The problem of deciding or choosing how to satisfy unlimited wants with limited resources is called economic problem

7 0
3 years ago
Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry. PCC owes Mitsubishi Heavy Industry 500 million ye
Illusion [34]

Answer:

Explanation:

a)

In  the case of forwarding hedge:

The future dollar cost will be = FX receiveable ÷ Foward exchange rate

= 500 million yen ÷ 110 yen/dollar

= $4.55 million

For money market hedge:

Present value of yen payable = 500 \ yen \div (1+ \dfrac{5}{100})

= \dfrac{500 \ yen }{1.06}

= 476.20 million yen

PCC would convert dollars to yens at the spot market rate and borrow yen such that it would get 500 million yen at maturity(i.e after one year)  for Mitsubishi to receive it.

Dollars needed to get these yen = 476.30 yen  ÷ 124 yen/dollar

= $3.84 million

Future Value of these dollars (for comparison with the foward market hedge) = $3.84 × (1 + 0.08)

= $4.15 million

Hence, the money market hedge is better as the dollar cost is lower than the forward market hedge to meet the obligation.

b)

On the maturity date, the spot rate is 110 yen/dollar  

Ad the strike price = 0.0081 /dollar

It is better for the company to go for the strike price due to the fact that it has a lower rate than the spot rate.

Now;

The premium amount = 500000000 yen × 0.014 dollar / yen

= 70000 dollars

However; the Future dollar-cost payable = 500000000 yen × 0.0081 dollar /yen

= 4050000 dollars

By applying option hedge, the total dollar cost required to meet the obligation = (4050000 + 70000) dollars

= 4120000 dollars

c)

The dollar cost needed from the option hedge required to matching the forward hedge is determined by subtracting it from the premium amount:

Thus;

for option hedge, dollar cost needed = (4550000 - 70000) dollars

= 4480000 dollars

The required future spot rate = 500000000/4480000

= 111.61 yen/dollar

As a result, at the future spot rate of 111.61 yen/dollar, PCC will be unconcerned about and indifferent about the option or forward hedge because the future dollar cost of meeting the obligation will be the same.

3 0
2 years ago
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