Question

BigBook.Com uses LIFO inventory accounting. Notes to BigBook.Com’s Year 9 financial statements disclose the following (it has a marginal tax rate of 35%):


Required:
a. Determine the amount by which Year 9 retained earnings of BigBook.Com changes if FIFO is used.
b. Determine the amount by which Year 9 net income of BigBook.Com changes if FIFO is used for both Years 8 and9.
c. Discuss the usefulness of LIFO to FIFO restatements in an analysis of BigBook.Com.
(AICPAAdapted)


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  • CreatedJanuary 22, 2015
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