Which of the following is used for the denominator of the current-period cost-to-retail percentage, assuming the LIFO retail method?

Multiple Choice

• None of the other answer choices are correct.

• Beginning inventory.

• Normal spoilage.

• Employee discounts.

Ren Cen Wu Refinery presented the following pretax data for its first year of operations.

Net sales		2,870
Cost of goods available for sale		2,440
Operating expenses		700
Effective tax rate		20	%
Ending inventories:
If LIFO is elected		910
If FIFO is elected		1,140

What is the Refinery's net income if it elects FIFO?

Multiple Choice

• $512.

• $696.

• $1,570.

• $870.