Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2021. Baker has an effective income tax rate of 35% and 100,000 shares of common stock issued and outstanding. The following additional information is available: Assuming Baker makes the change in the first quarter of 2021, how much is reported as net income for the first quarter of 2021?
A) $492,000.
B) $494,800.
C) $500,000.
D) $505,200.
E) $527,950.

Question

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2021. Baker has an effective income tax rate of 35% and 100,000 shares of common stock issued and outstanding. The following additional information is available:  Assuming Baker makes the change in the first quarter of 2021, how much is reported as net income for the first quarter of 2021?
A) $492,000. 
B) $494,800. 
C) $500,000. 
D) $505,200. 
E) $527,950.

Quizplus · Accepted Answer

The Answer of Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2021. Baker has an effective income tax rate of 35% and 100,000 shares of common stock issued and outstanding. The following additional information is available:  Assuming Baker makes the change in the first quarter of 2021, how much is reported as net income for the first quarter of 2021?
A) $492,000. 
B) $494,800. 
C) $500,000. 
D) $505,200. 
E) $527,950.

Baker Corporation Changed from the LIFO Method to the FIFO