Difference in net income between the two methods material

Assignment Help Accounting Basics
Reference no: EM13979045

T J International was founded in 1969 as Trus Joist International. The firm, a manufacturer of specialty building products, has its headquarters in Boise, Idaho. The company, through its partnership in the Trus Joist MacMillan joint venture, develops and manufactures engineered lumber. This product is a high- quality substitute for structural lumber, and uses lower-grade wood and materials formerly considered waste. The company also is majority owner of the Outlook Window Partnership, which is a consortium of three wood and vinyl window manufacturers. Following is T J International's adapted income statement and information concerning inventories from its annual report.

Instructions

(a) How much would income before taxes have been if FIFO costing had been used to value all inventories?

(b) If the income tax rate is 46.6%, what would income tax have been if FIFO costing had been used to value all inventories? In your opinion, is this difference in net income between the two methods material? Explain.

(c) Does the use of a different costing system for different types of inventory mean that there is a different physical flow of goods among the different types of inventory?Explain.

Reference no: EM13979045

Questions Cloud

Find the project expected npv : Assume that the project has average risk. Find the project"s expected NPV. (Hint: Use expected values for the net cash flow in each year.)
Identify and describe the organized crime groups : Identify and describe the organized crime groups most closely associated with prostitution, gambling, and drug crimes in urban areas. Support your response with your research
Identify the types of economic considerations : Identify the types of economic considerations that would influence profitability in making the choice between the present production approaches versus making the decision to shift to a "level loading" set of processes. (15%)
Relationship between organized crime and youth gangs : The Relationship between Organized Crime and Youth Gangs - In Centervale, the arrest rate for young individuals (seventeen to twenty-two years) has increased by more than 50 percent during the past year
Difference in net income between the two methods material : Does the use of a different costing system for different types of inventory mean that there is a different physical flow of goods among the different types of inventory?Explain.
Calculate ending inventory and cost of goods : Calculate ending inventory and cost of goods sold at March 31, 2015, using the specific identification method. The March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the Marc..
How long does take an electron to go from one end of light : Larry installs a string of battery powered Christmas lights on his truck. The string of lights has the following charactersistics: lenth= 21 m, mobile charge density = 8.5e28 electrons/m^3, cross-sectional area=1.8e-7 m. when the lights are turned..
What are the potential penalties : Is Sanchez Printers proceeding legally by requiring its employees to work extra hours without compensation to make up for the hours lost on the Friday holiday? Explain. What are the potential penalties the company could face if their actions are i..
What is the reorder point if the lead time is not consistent : What is the reorder point if the lead time is not consistent at 15 days, but has a standard deviation of 0.5 days?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  During its most recent fiscal year simon enterprises sold

during its most recent fiscal year simon enterprises sold 200000 electric screwdrivers at a price of 15 each. fixed

  Internet affected marketing research

What is marketing research? How has the Internet affected marketing research? As part of your answer, address time, cost, approaches, and validity. Why is marketing research important to developing marketing strategy?

  A personal statement of financial condition dated december

a personal statement of financial condition dated december 31 2008 is to be prepared for wilhelm holz.he provides the

  Information in the adjusted trial balance reported

1.Use the information in the adjusted trial balance reported in Exercise 4-4 to compute the current ratio as of the balance sheet date (round the ratio to two decimals).

  What are internal controls why do companies need them what

what are internal controls? why do companies need them? what are some examples of internal controls? who is responsible

  The following data relate to the direct materials cost for

the following data relate to the direct materials cost for the production of 4000 automobile tiresactual 130242 pounds

  Compute the departmentu2019s equivalent units of production

the production department in a process manufacturing system completed 191500 units of product and transferred them to

  An investment project costs 17900 and has annual cash flows

an investment project costs 17900 and has annual cash flows of 3600 for 6 years. enter 0 when there is no payback

  Since 2005 publicly traded companies in the european union

since 2005 publicly traded companies in the european union have been required to use ifrs in preparing their

  Stratford company distributes a lightweight lawn chair that

stratford company distributes a lightweight lawn chair that sells for 40 per unit. variable expenses are 20.00 per unit

  Income tax results of partnership formation

Bill contributes property (adjusted basis of $60,000; fair market value of $80,000) in exchange for his partnership interest. Which of the following statements is true concerning the income tax results of this partnership formation?

  Which company appears more liquid

Which company appears more profitable? Describe the ratio(s) that you used to reach this decision. Which company appears more liquid? Describe the ratio(s) that you used to reach this decision. Which company appears more solvent? Describe the ratio(s..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd