Baker Company Has Been Using the LIFO Method of Inventory

Multiple Choice

Baker Company has been using the LIFO method of inventory valuation for 10 years, since it began operations.Its 2007 ending inventory was $40,000, but it would have been $60,000 if FIFO had been used.Thus, if FIFO had been used, Baker's income before income taxes would have been

A) $20,000 greater over the 10-year period.
B) $20,000 less over the 10-year period.
C) $20,000 greater in 2007.
D) $20,000 less in 2007.