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
Related questions
Question
![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:
Cost of
goods sold
LIFO
$ 40,000 $ 75,000
Cost of
goods
sold
FIFO
Prior to 2021
1st quarter 2021
$ 10,000 $ 18,000
Net income before effect of accounting change:
1st quarter 2020
1st quarter 2021
Multiple Choice
O
Assuming Baker makes the change in the first quarter of 2021, compute net income per common share.
O
O
$4.92
$4.95.
$5.00
$5.05.
$300,000
$500,000
$5.28.
After-tax
Difference Difference
$35,000
$22,750
$ 5,200
$ 8,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F56b0c671-e9e0-4c61-94c3-c4083cf4fc77%2F0da93bdb-7f17-488e-b761-864057b9f6fe%2Frq7vlmd_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
Cost of
goods sold
LIFO
$ 40,000 $ 75,000
Cost of
goods
sold
FIFO
Prior to 2021
1st quarter 2021
$ 10,000 $ 18,000
Net income before effect of accounting change:
1st quarter 2020
1st quarter 2021
Multiple Choice
O
Assuming Baker makes the change in the first quarter of 2021, compute net income per common share.
O
O
$4.92
$4.95.
$5.00
$5.05.
$300,000
$500,000
$5.28.
After-tax
Difference Difference
$35,000
$22,750
$ 5,200
$ 8,000
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning