1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
dybincka [34]
3 years ago
15

GG Inc. uses LIFO. GG disclosed that if FIFO had been used, inventory at the end of 2021 would have been $16 million higher than

the difference between LIFO and FIFO at the end of 2020. Assuming GG has a 25% income tax rate:
Business
1 answer:
g100num [7]3 years ago
3 0

Answer:

In a situation where FIFO had been used, its reported net income for 2020 would have been $12 million higher than using LIFO for its financial statements.

Explanation:

The Ending Inventory of 2020 would have been $16 million higher in a case where FIFO had been used.

Hence, The Higher ending inventory will tend to means the lower cost of goods sold as well as the higher income which means that if FIFO had been used,the income of 2020 would have been higher by $16 million.

Income tax rate = 25%

The first step is to calculate for the Increase in Income tax expense

Using this formula to calculate for the Increase in Income tax expense

Increase in Income tax expense = Increase in Income x Income tax rate

Let plug in the formula

Increase in Income tax expense= 16 x 25%

Increase in Income tax expense= $4 million

The second step is to calculate for the Increase in Income net income

Using this formula

Increase in net income = Increase in income - Increase in Income tax expense

Let plug in the formula

Increase in net income = 16 - 4

Increase in net income = $12 million

Therefore in a situation where FIFO had been used, its reported net income for 2020 would have been $12 million higher than using LIFO for its financial statements.

You might be interested in
What is a lease? AA loan from a bank used to buy a house. BA loan from a bank used to rent a home. CA contract outlining the ter
julia-pushkina [17]
Contract outlining the terms under which a landlord agrees to rent property to a tenant :)
8 0
3 years ago
Read 2 more answers
The Tax Cuts and Jobs Act passed in December, 2017, eliminated any personal exemptions ($4,050 per preson) but increased the sta
Sergio039 [100]

Answer:

Answer for the question = the threshold went down by = $9000.

The Tax Cuts and Jobs Act passed in December, 2017, eliminated any personal exemptions ($4,050 per preson) but increased the standard deduction to $12,000 for single filers and $24,000 for joint filers beginning in 2018 compared to $6,350 and $12,700 respectively in 2017. Ignoring any other changes made by the new tax law (and there are other important changes such as expansion of a child tax credit), what would the threshold for having any taxable income for a family of two adults and three dependent children be in 2018 compared to 2017? (Hint: the threshold in 2017 was the standard deduction for a married couple with five personal exemptions. "

explanation is attached .

Explanation:

4 0
3 years ago
How is the principle of open opportunity different from guaranteeing success to everyone in the marketplace?
sesenic [268]
The principle of open opportunity in the marketplace means that anyone who wants to put up a business is welcome to do so. However, the success of his business rests entirely on how well it is received in the market.

Guaranteeing success to everyone in the marketplace is impossible. Competition is always present. Demand and supply can be affected by factors beyond human control.
7 0
2 years ago
During 2018, Jerry is a self-employed therapist, and his net earned income is $187,600 from his practice. Jerry's SEP Plan, a de
DerKrebs [107]

Answer:

$55,000

Explanation:

A Simplified Employee Pension (SEP) Plan is used in the United States by employers or self-employed persons to provide retirement benefits for themselves and their employees

As stated by the Internal Revenue Service (IRS), the contributions that can be made to each employee’s SEP-IRA each year is which one is lower between 25% of compensation and the maximum of $55,000 for 2018.

We can then calculate as follow:

1. Jerry's contribution calculation = 25% × $187,600 =  46,900.

2. Maximum allowable = $55,000.

Since a defined contribution plan states that Jerry will contribute the maximum amount allowable and the maximum for 2018 is $55,000, Jerry's contribution will therefore be $55,000.

3 0
3 years ago
Carly donated inventory (ordinary income property) to a church. She purchased the inventory last month for $100,000, and on the
MissTica

Answer:

$92,00

Explanation:

Base on the scenario been described in the question which we saw how Carly donated an to the church, when she purchased the gift, it was $100,000 but when she is to present the gift to the church, the fair market value became $92,000 which is her maximum charitable contribution deduction

the charitable deduction for ordinary income property is the lesser of fmv or basis limited to 50% of AGI

8 0
3 years ago
Other questions:
  • Union Pacific Railroad reported net income of $770 million in 1993, after interest expenses of $320 million. (The corporate tax
    15·1 answer
  • According to Thorstein Veblen, a successful businessman would be most likely to demonstrate his worth to others by:_______. a. a
    15·1 answer
  • Machinery was purchased for $85,000. Freight charges amounted to $3,500 and there was a cost of $10,000 for building a foundatio
    10·1 answer
  • Which of the following is not part of manufacturing overhead for producing a​ computer? A. Manufacturing plant property taxes B.
    11·1 answer
  • Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company c
    5·1 answer
  • Dong Wang wants to retire when he has saved $1,500,000. He can make 30 payments of $15,000 each, with each payment made at the b
    7·1 answer
  • What is the world's largest free trade area?
    14·2 answers
  • Daimler AG agreed to sell 30 trucks to Romania in exchange for 150 Romanian-made Jeeps, which is an example of
    9·1 answer
  • When using the gross method, the journal entry to record taking a discount when paying for goods previously purchased on account
    13·1 answer
  • Select the correct answer from each drop-down menu. when the value of a country’s currency falls, the currency is , so one unit
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!