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Holliday Company's Inventory Records Show the Following Data: a Physical

Question 112

Multiple Choice

Holliday Company's inventory records show the following data: Holliday Company's inventory records show the following data: A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used? A) $800 additional taxes B) $3,200 tax savings C) $4,000 tax savings D) $4,000 additional taxes A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used?


A) $800 additional taxes
B) $3,200 tax savings
C) $4,000 tax savings
D) $4,000 additional taxes

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