Details of this Paper

The Hasting Company began operations on January 1, 2003 and uses the FIFO method i




Question;1.;The Hasting;Company began operations on January 1, 2003 and uses the FIFO method in costing;its raw material inventory. An analyst is wondering what net income would have;been if the company had consistently followed LIFO (instead of FIFO) from the beginning;1/1/2003. He has the following information available to him;12/31/2003 12/31/2004;Final Inventory Final Inventory;Under FIFO $240,000 Under FIFO $270,000;Under LIFO $200,000 Under LIFO $210,000;For2003 and 2004;Pretax Income under FIFO $120,000 and $170,000;What would net income have been in 2004 if Hastings had used LIFO since;1/1/2003?;$ 110,000;$ 150,000;$ 170,000;$ 230,000;Top of Form;2.;The major accounting difference;between interest incurred during a period and cash dividends declared during;the same period is;Top of Form;?;Interest decreases;retained earnings while dividend declared increases retained earnings;?;Interest reduces net;income while dividends declared do not affect net income;?;Interest does not affect;net income while dividends reduce net income;?;There is no major;difference. Both are treated identically for accounting purposes.;Bottom of Form;3.;The following financial ratios are for Average;Corp. and Superior Corp., two hardware stores.;Which of the following;statements is inconsistent with the above ratios?;Top of Form;?;Superior Corp has a higher;return on equity primarily because it has a significantly higher net income;margin;?;Average Corp. on a;relative basis uses significantly more debt financing than Superior Corp.;?;Average Corp. utilizes its;assets more effectively than Superior Corp.;?;Superior Corp. generates;more income per dollar of sales than Average Corp.;4. FRC Inc. acquired Marketing Inc on 1/1/2004. Marketing Inc. has;10,000 shares outstanding. Each share in Marketing Inc. was exchanged for half;a share in FRC, Inc. Shares of FRC Inc., were trading at $100 per share at the;date of the announcement of the transaction. Marketing Inc, had the following;assets and liabilities that were assumed by FRC Inc.Bottom of Form;The amount of Goodwill;recognized by FRC, Inc. on January 1, 2004 is;Top of Form;?;$400,000;?;$360,000;?;$495,000;?;$455,000;Bottom of Form


Paper#37913 | Written in 18-Jul-2015

Price : $20