Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2011. Baker

Question:

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2011. 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 2011 and that $400,000 net income is earned during the second quarter, how much is reported as net income for the second quarter of 2011? Please provide detailed calculation.
A. $400,000.
B. $405,200.
C. $427,950.
D. $894,850.
E. $905,200.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...