Nu Company reported the following pretax data for its first year of operations. Net sales 2,970...

Question

Question

Nu Company reported the following pretax data for its first year of operations.


Net sales	2,970
Cost of goods available for sale	2,370
Operating expenses	700
Effective tax rate	30	%
Ending inventories:
If LIFO is elected	860
If FIFO is elected	1,090

What is Nu's net income if it elects FIFO?

Multiple Choice

business accounting

Answer 1

Answer #1

Cost of Goods Sold = 2370 - Ending inventory 1090 = 1280

Net income = Net sales - Cost of Goods Sold - Operating expenses - Taxes

= 2970 - 1280 - 700 - 30%

= 990 - 30%

= 693

Option C is the answer

Answer 2

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