M7-5 (Static) Matching Financial Statement Effects to Inventory Costing Methods LO7-2Select whether the FIFO or LIFO inventory costing method normally produces each of the following effects under the listedcircumstances.a. Declining costsb.Highest net incomeHighest inventoryRising costsHighest net incomeHighest inventory !Required informationE7-11 (Static) Evaluating the Choice among Three Alternative Inventory Methods Based on Income andCash Flow Effects LO7-2, 7-3[The following information applies to the questions displayed below.]Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (endinginventory December 31, prior year), 2,000 units at $38; purchases, 8,000 units at $40; expenses (excluding income taxes),$184,500; ending inventory per physical count at December 31, current year, 1,800 units; sales, 8,200 units; sales price perunit, $75; and average income tax rate, 30 percent.E7-11 Part 33. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming thatprices were falling?Net incomeIncome taxes paid (cash flow)

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M7-5 (Static) Matching Financial Statement Effects to Inventory Costing Methods LO7-2 Select whether the FIFO or LIFO inventory costing method normally produces each of the following effects under the listed circumstances. a. Declining costs Highest net income Highest inventory b. Rising costs Highest net income Highest inventory

M7-5 (Static) Matching Financial Statement Effects to Inventory Costing Methods LO7-2 Select whether the FIFO or LIFO inventory costing method normally produces each of the following effects under the listed circumstances. a. Declining costs Highest net income Highest inventory b. Rising costs Highest net income Highest inventory

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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