Wilma Company began operations in 2010 and uses the average cost method in costing its inventory.In 2011, Wilma is investigating a change to the LIFO method.Before making that determination, Wilma desires to determine what effect such a change will have on net income.Wilma has compiled the following information: Assume a 40% tax rate.
If Wilma adopted LIFO in 2011, net income would be
A)$ 80, 000
B)$116, 000
C)$170, 000
D)$224, 000

Question

Wilma Company began operations in 2010 and uses the average cost method in costing its inventory.In 2011, Wilma is investigating a change to the LIFO method.Before making that determination, Wilma desires to determine what effect such a change will have on net income.Wilma has compiled the following information:  Assume a 40% tax rate.
If Wilma adopted LIFO in 2011, net income would be
A)$ 80, 000 
B)$116, 000 
C)$170, 000 
D)$224, 000

Quizplus · Accepted Answer

The Answer of Wilma Company began operations in 2010 and uses the average cost method in costing its inventory.In 2011, Wilma is investigating a change to the LIFO method.Before making that determination, Wilma desires to determine what effect such a change will have on net income.Wilma has compiled the following information:  Assume a 40% tax rate.
If Wilma adopted LIFO in 2011, net income would be
A)$ 80, 000 
B)$116, 000 
C)$170, 000 
D)$224, 000

Wilma Company Began Operations in 2010 and Uses the Average