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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.

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Assume you plan to travel to the Southern Hemisphere after final exams. You’ve narrowed your choices down to two that you like e
storchak [24]

Answer:

The trip to Colombia is priced less at $1,497.07.

Explanation:

Using the following spot inter-bank market on November 1, 2019,

1 USD = 3339.85 COP  (Colombian Pesos) and

1 USD = 1.4455 AUD (Australian Dollars

5,000 Australian Dollars on that day would be equivalent to

= \frac{5000}{1.4455}

= $3,459.01

5,000,000 Colombian Pesos on that day would be equivalent to

= \frac{5000000}{3339.85}

= $1,497.07

Considering the U.S Dollars equivalent of both cost, the trip to Colombia is priced less at $1,497.07.

4 0
3 years ago
Foote Company recorded a purchase discount of $200 on merchandise the company had purchased on account a few days ago. Foote use
romanna [79]

Answer:

B. n/a (200) 200 200 n/a 200 n/a

Explanation:

A purchase discount is a contra-expense account which has a credit balance. Expenses have normal debit balances, so a credit balance will decrease the expenses incurred by the company.

E.g. you paid $100 within the discount period (2% discount)

Dr Accounts payable 100

    Cr Cash 98

    Cr Purchase discounts 2

This transaction doe snot affect assets, but it will decrease liabilities by $200 and increase R.E. by $200. Since this is a contra expense account, it will increase revenue and net income. It doesn't generate any additional cash flows.

7 0
3 years ago
Does anyone know how much smart boards are?
ivanzaharov [21]
Depends on brand. can vary from a few hundred to more.
6 0
3 years ago
Read 2 more answers
George had a previous balance on his credit card of $330.19 on which he paid $50.00. He
Svetllana [295]
Since it’s a credit card you must subtract 330.19-50.00 = 280.19 then with the fine you add 280.19+4.20= 284.39. So the new balance is $284.39
3 0
3 years ago
The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected
IceJOKER [234]

Answer:

current stock price = $28.90

so correct option is (a) $28.90

Explanation:

given data

dividend of D1 = $1.25

constant rate = 6.00%

beta = 1.15

market risk premium = 5.50%

risk-free rate = 4.00%

solution

first we get here Expected rate of return that is express as

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)   .................1

put here value and we get

Expected rate of return = 4% + 1.15 × 5.50%

Expected rate of return = 4% + 6.325%

Expected rate of return = 10.325%

so now we get current stock price

current stock price = Next year dividend ÷ (Required rate of return - growth rate)   .................2

put here value and we get

current stock price = $1.25 ÷ (10.325% - 6%)

current stock price = $1.25 ÷ 4.325%

current stock price = $28.90

so correct option is (a) $28.90

3 0
3 years ago
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