Question
Presented below are the condensed financial statements of Excel Athletics: Restate the companys net income for Year 2 to reflect the use of FIFO instead
Presented below are the condensed financial statements of Excel Athletics:
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Restate the companys net income for Year 2 to reflect the use of FIFO instead of LIFO. Assume an effective tax rate of 30 percent.
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Assuming a change to FIFO is made for income tax purposes, how much will income taxes change for Year 2?
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Calculate the new balances of the companys balance sheet accounts as of December 31, Year 2 to reflect a change to FIFO.
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Calculate the current ratio for Year 2 under FIFO and LIFO. Under which inventory method does the company appear more liquid?
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