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 additionalinformation is available:Cost ofgoods soldLIFO$ 40,000 $ 75,000Cost ofgoodssoldFIFOPrior to 20211st quarter 2021$ 10,000 $ 18,000Net income before effect of accounting change:1st quarter 20201st quarter 2021Multiple ChoiceOAssuming Baker makes the change in the first quarter of 2021, compute net income per common share.OO$4.92$4.95.$5.00$5.05.$300,000$500,000$5.28.After-taxDifference Difference$35,000$22,750$ 5,200$ 8,000

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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: Multiple Choice Prior to 2021 1st quarter 2021 Net income before effect of accounting change: 1st quarter 2020 1st quarter 2021 O $4.92 $4.95. Assuming Baker makes the change in the first quarter of 2021, compute net income per common share. $5.00. Cost of goods sold FIFO $ 40,000 $ 10,000 $ 18,000 $ 8,000 $5.05. Cost of goods sold $5.28. LIFO Difference Difference $75,000 $35,000 $22,750 $ 5,200 After-tax $300,000 $500,000

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: Multiple Choice Prior to 2021 1st quarter 2021 Net income before effect of accounting change: 1st quarter 2020 1st quarter 2021 O $4.92 $4.95. Assuming Baker makes the change in the first quarter of 2021, compute net income per common share. $5.00. Cost of goods sold FIFO $ 40,000 $ 10,000 $ 18,000 $ 8,000 $5.05. Cost of goods sold $5.28. LIFO Difference Difference $75,000 $35,000 $22,750 $ 5,200 After-tax $300,000 $500,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 3MC

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