1. All of the following statements regarding the financial statement impact of inventory costing are true except.

Multiple Choice

• When purchase prices are changing, the methods to assign inventory costs result in different amounts for cost of goods sold.

• Cost of goods sold on the income statement approximates current cost when LIFO is used.

• Selected costing method does not impact net income.

• Inventory on the balance sheet approximates current cost when FIFO is used.

• The weighted average method smooths out erratic changes in costs.

2. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $10,300. What is the amount of total unemployment taxes the employer must pay on this employee's wages?

• $61.80.

• $556.20.

• $0.00.

• $618.00.

• $420.00.

3. A company's interest expense is $22,000. Its income before interest expense and income taxes is $165,000. Its net income is $72,600. The company's times interest earned ratio equals:

Multiple Choice

• 7.50.

• 0.133.

• 2.27.

• 0.44.

• 0.30.