Wilma Company Began Operations in 2010 and Uses the Average

Multiple Choice

Wilma Company began operations in 2010 and uses the average cost method in costing its inventory.In 2011, Wilma is investigating a change to the LIFO method.Before making that determination, Wilma desires to determine what effect such a change will have on net income.Wilma has compiled the following information: Assume a 40% tax rate.
If Wilma adopted LIFO in 2011, net income would be

A) $ 80, 000
B) $116, 000
C) $170, 000
D) $224, 000