Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2013. Baker has an effective income tax rate of 30 percent 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 2013, compute net income per common share.
A) $4.92.
B) $4.95.
C) $5.00.
D) $5.05.
E) $5.28.

Question

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2013. Baker has an effective income tax rate of 30 percent 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 2013, compute net income per common share.
A) $4.92. 
B) $4.95. 
C) $5.00. 
D) $5.05. 
E) $5.28.

Quizplus · Accepted Answer

$505,200 1^st Qtr Income/Common Stock Shares Outstanding 100,000 = $5.05 EPS

Baker Corporation Changed from the LIFO Method to the FIFO