orporation is considering switching from FIFO to LIFO to reduce its income tax expense Assuming a corporate income tax rate of 40 percent, calculate the tax savings this would have made for 2009 to 2011. Would you recommend that Excel make this change?
Q3. Dollar sales for 2012 are expected to drop by approximately 8 percent, as a recession in Excel's market is forecasted to continue at least through the first three quarters of the year. Total sales are forecasted to be 2.700 cartons. Excel will be unable to raise its selling price from the 2011 level of $35:75, However, costs are expected to increase to $24 per carton for the whole year. Due to these costuprice pressures, the corporation wishes to lower its investment in inventory by holding only the essential inventory of 400 cartons at any time during the year.
What is the effect of remaining on FIFO, assuming Excel had adopted FIFO in 2009? What is the effect of remaining on LIFO, assuming Excel adopted LIFO in 2009? What method would you recommend now?
04. What is the LIFO reserve in 20097 What is the LIFO reserve in 20102 What is the significance of the LIFO reserve number? How much did the LIFO reserve increase in 2010? What is the significance of this increase?