Selected financial data from Krandall, Inc. ' s balance sheet for the year ended December 31 was as follows (in $ ) :
A．Cash
B．$1100000
C．Accounts Payable
D．$ 400000
E．Accounts Receivable
F．300000
G．Deferred Tax Liability
H．700000
I．Inventory
J．2400000
K．Long-term Debt
L．
8200000
M．Property, Plant & Eq.
N．8000000
O．Conunon Stock
P．1000000
Q．Total Assets
R．11800000
S．Retained Earnings
T．1500000
U．LIFO Reserve at Jan. 1
V．600000
W．Total Liabilities & Equity
X．11800000
Y．LIFO Reserve at Dec. 31
Z．900000
Z．
Z．
参考答案：A
解析：With FIFO instead of LIFO: Inventory would be higher by $ 900000, the amount of the ending LIFO reserve. Cumulative pretax income would also be higher by $ 900000, so taxes paid would be higher by 0.40 × $ 900000 = $ 360000. Therefore cash would be lower by $ 360000. Cumulative retained earnings would be higher by (1-0.40)×$ 900000 = $ 540000. So assets under FIFO would be $ 11800000 + $ 900000 - $ 360000 = $ 12340000 and equity would be $1000000 + $1500000 + $ 540000 = $ 3040000. The assets-to-equity ratio would be $12340000/$ 3040000 =4.06.