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 2020, how much is reported as net income for the first quarter of 2020?
A) $300,000.
B) $322,750.
C) $335,000.
D) $265,000.
E) $277,250.

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 2020, how much is reported as net income for the first quarter of 2020?
A) $300,000. 
B) $322,750. 
C) $335,000. 
D) $265,000. 
E) $277,250.

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 2020, how much is reported as net income for the first quarter of 2020?
A) $300,000. 
B) $322,750. 
C) $335,000. 
D) $265,000. 
E) $277,250.

Baker Corporation Changed from the LIFO Method to the FIFO