15. Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2018. 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:

	Cost of goods sold				Cost of goods sold									After-tax
	FIFO				LIFO				Difference					Difference
Prior to 2018	$	40,000			$	75,000			$	35,000				$	22,750
1st quarter 2018		10,000				18,000				8,000					5,200
Net income before effect of accounting change:
1st quarter 2017					$	300,000
1st quarter 2018					$	500,000

Assuming Baker makes the change in the first quarter of 2018, how much is reported as net income for the first quarter of 2018?

A) $505,200.

B) $494,800.

C) $500,000.

D) $527,950.

E) $492,000.

16. Which of the following statements is correct?

a. The functional currency must always be the currency of the US parent company.

b. Non-US subsidiaries always record transactions in $US.

c. If the foreign-currency-denominated subsidiary financial statements are already in the functional currency, but not in the parents currency, then the financial information must be translated into the parents currency.

d. None of the above