The Accountant at Cedric Company Has Determined That Income Before

Multiple Choice

The accountant at Cedric Company has determined that income before income taxes amounted to $7,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $315 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?

A) $5,950
B) $7,000
C) $7,315
D) $8,050