58/AppData/Local/Packages/Microsoft Microsoft Edge_8wekyb3d8bbwe/TempState/Downloads/Financial%20Acct%20E Q17 Using different cost flow assumption, the Houston Electronics company recognizes different amount of net income. The following is a condensed comparative income statement for Houston Electronics company. HOUSTON ELECTRONICS Condensed Income Statements FIFO Average-Cost Sales revenue $18,500 $18,500 $18,500 Beginning inventory 1,000 1,000 1,000 Purchases 11,000 11,000 11,000 Cost of goods available for sale 12.000 12.000 12,000 Less: Ending inventory 5,800 5,000 5,400 Cost of goods sold 6,200 7,000 6,600 Gross profit 12,300 11,500 11.900 Operating expenses 9,000 9,000 9,000 Income before income taxes 300 2,500 2.900 Income tax expense (30%) 990 870 Net income $ 2,310 S 1,750 S 2,030 IN wc 750 Which of the following statement is FALSE? A. In a period of inflation, FIFO produces a higher net income because lower unit costs of the first units purchased are matched against revenue. B. In a period of inflation, LIFO produces a lower net income because higher unit costs of the last goods purchased are matched against revenue. C. In a period of deflation (prices fall), FIFO produces a higher net income. D. Regardless of whether prices are rising or falling, average cost produces net income between FIFO and LIFO. Q18 Tiffany Company's management wants to maintain a minimum monthly cash balance of $15,000. At the beginning of March, the cash balance is $16,500, expected cash receipts for March are $210,000, and cash disbursements are expected to be $220,000. How much cash if any, must Tiffany Company borrow to maintain the desired minimum monthly balance? A. $7,500 B. 58,500