Hall Inc. has beginning inventory of 100,000 units (cost of $15 per unit) accounted for using the LIFO inventory method. During the year, the company sold more items than purchased, causing the ending inventory balance to drop to 65,000 units. Assuming a tax rate of 25%, and a current replacement cost of inventory of $28 per unit, what is the LIFO liquidation effect on after-tax income? Select one:   a. $341,250 b. $455,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Hall Inc. has beginning inventory of 100,000 units (cost of $15 per unit) accounted for using the LIFO inventory method. During

the year, the company sold more items than purchased, causing the ending inventory balance to drop to 65,000 units.

Assuming a tax rate of 25%, and a current replacement cost of inventory of $28 per unit, what is the LIFO liquidation effect on

after-tax income?

Select one:

 

a. $341,250

b. $455,000

c. $633,750 

d. $113,750

Hall Inc. has beginning inventory of 100,000 units (cost of $15 per unit) accounted for using the LIFO inventory method. During
the year, the company sold more items than purchased, causing the ending inventory balance to drop to 65,000 units.
Assuming a tax rate of 25%, and a current replacement cost of inventory of $28 per unit, what is the LIFO liquidation effect on
after-tax income?
Select one:
O
O
a. $341,250
b. $455,000
c. $633,750 *
d. $113,750
Transcribed Image Text:Hall Inc. has beginning inventory of 100,000 units (cost of $15 per unit) accounted for using the LIFO inventory method. During the year, the company sold more items than purchased, causing the ending inventory balance to drop to 65,000 units. Assuming a tax rate of 25%, and a current replacement cost of inventory of $28 per unit, what is the LIFO liquidation effect on after-tax income? Select one: O O a. $341,250 b. $455,000 c. $633,750 * d. $113,750
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