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2 years ago

If a company uses LIFO, a LIFO liquidation causes a company's income taxes to increase:_______

Business

1 answer:

olasank [31]2 years ago

4 0

Answer: a. When inventory purchase costs are rising.

Explanation:

Last In First Out is an inventory stock valuation method where newer inventory is sold first and older inventory are sold last.

When a LIFO liquidation occurs, it means that the company has sold off its new stock and are now selling the older one.

This will lead them to have a lower cost of goods sold as the older stock is usually cheaper. If Inventory purchase costs are increasing in the market, then sales prices will have to increase as well. The company will sell at this new price but will still have that lower cost of goods sold.

This means that they would have more profits as a result which will lead to more taxes being charged on them.

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A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 comp

Mandarinka [93]

Answer:

B Direct Materials 210,000; Conversion Cost 180,000

Explanation:

beginning inventory 50,000

start and finished 120,000

Complete and trasnferred-out 170,000

Convesion Cost:

Coplete and transferred-out 170,000

Ending Inventory 40,000 x 1/4 = 10,000

CC equivalent units 180,000

DIrect Materials

Coplete and transferred-out 170,000

Ending Inventory 40,000x100% = 40,000

DM equivalent units 210,000

<u>Under W-A method we justdiscriminate on transferred-out and ending work in process.</u>

We don't do the difference between started and finished and beginning inventory.

8 0

3 years ago

Splish Company purchased a computer for $9,920 on January 1, 2019. Straight-line depreciation is used, based on a 5-year life an

BartSMP [9]

Answer:

$2914

Explanation:

The following steps would be taken to determine the answer

1. Calculate depreciation expense given the initial information

2. calculate the accumulated depreciation by the second year. Accumulated depreciation is sum of depreciation expense

3. subtract the accumulated depreciation from the cost price of the asset. This would give the book value

4. calculate the depreciation expense using the new information and the book value

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

($9,920 - $1240) / 5 = $1736

Accumulated depreciation = 1736 x 2 = $3472

Book value at the beginning of 2021 = 9920 - 3472 = $6448

Depreciation expense in 2021 = (6448 - 620) / 2 = $2914

5 0

2 years ago

On January 1, 2017, the merchandise inventory of Glaus, Inc. was $1,600,000. During 2017 Glaus purchased $3,200,000 of merchandi

valentinak56 [21]

Answer: $1,800,000

Explanation:

The merchandise inventory of Glaus at December 31, 2017 will be:

Begining Inventory = $1,600,000

Add: Purchases = $3,200,000

Less: Cost of goods sold = $4,000,000

Add: Gross profit = 25% × $4,000,000 = $1,000,000

Ending Inventory = $1,800,000

The answer is $1,800,000.

8 0

2 years ago

In an effort to make better and more efficient purchase decisions, the Ford Motor Co. includes various people, depending on the

expeople1 [14]

Answer:

Buying Center.

Explanation:

A Buying Center is a group if individuals within an organization that are responsible for making purchase decisions.

The Buying Center is also called the Decision Making Unit (DMU), and it includes personnel from various departments.

7 0

2 years ago

What does an increase in the consumer price index indicate?

erastova [34]

It indicates signs of inflation in the economy

3 0

3 years ago