The controller of a company that sells inventory

Assignment Help Financial Accounting

Reference no: EM13957994

Suppose you are the controller of a company that sells inventory. Also, suppose the economy currently enters a period of high inflation. Although profits are higher this year than last year, you realize that the cost to replace inventory is also higher. You are aware that many companies are changing to the Last-In First-Out (LIFO) inventory method to save on taxes in the current year; however, you are concerned that when prices eventually decline, the LIFO method will result in higher taxes. Because declining prices are usually equated with economic recession, it is likely that the higher taxes will be paid when revenues are declining.

What factors should you consider before making a change to LIFO? Based on the above considerations, what would you recommend?

Reference no: EM13957994

Questions Cloud

Find also the chance the game reaches 3-3 ("deuce") : Suppose buses arrive at random, at average rate , so that the time to wait follows an Exponential distribution. Show that, conditional on you having already waited time T, without a bus, the remaining time you have to wait is independent o..

What is the process for casting impressions : What is the process for casting impressions and creating molds for footwear and tiretread impressions outside of a warehouse. Describe and explain in detail using a step-by-step process

Satirical exposure of religious corruption and prejudice : Machiavelli wrote in The Prince that a "prince must not keep faith when by doing so it would be against his self-interest." What would a ruler following this precept most likely do?

Find the expected number of games that are played : Consider problem 1 with i = 2. Find the variance of the number of games played and show that this number is maximized when p = ½.

The controller of a company that sells inventory : Suppose you are the controller of a company that sells inventory. Also, suppose the economy currently enters a period of high inflation. Although profits are higher this year than last year, you realize that the cost to replace inventory is also high..

Create a new product which would appeal to your market : Choose the target market for your product, and describe your target market in detail. Create a new product which would appeal to your market.

Find the probability that jury renders a correct decision : Suppose that it takes at least 9 votes from a 12-member jury to convict a defendant. Suppose the probability that a juror votes a guilty person innocent is 0.2.

Present value of the minimum lease payments : Compute the Present value of the Minimum Lease payments

Explain why the senior managers at quantum products : Explain why the senior managers at Quantum Products have an incentive to over invest.

User Account

All Pages