By the use of Lifo in a period where the prices rise, companies avoid to report paper profit, also called phantom profit, as economic gain. Have in mind that in periods of changing prices, the cost flow assumption can have a significant impact onincome and on evaluations based on income. That is why when Lifo is used the companies tend to <span>report the lowest net income </span>
A. Would be the best answer
Answer:
the ex-dividend price is $108.66
Explanation:
The computation of the ex-dividend price is shown below:
The Aftertax dividend is
= Dividend × (1 - tax rate)
= $6.20 (1 - 0.30)
= $4.34
Now the exdividend price is
= Selling price of a share - after tax dividend
= $113 - $4.34
= $108.66
hence, the ex-dividend price is $108.66
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Option A, but even that is not a requirement.
Hope it helps!
Answer:
A
Explanation:
Matching principle of accounting says that revenue must be recorded as soon as it is generated, not on the basis of its collection. Since income receivable is recorded as an income, therefore it must be recorded as long as it is earned not as it is collected.
Same is the case of expense as long as it is occurred, it should be recorded, not by payment is recorded.
