Exercise 5-18 (Algo) Comparing LIFO numbers to FIFO numbers; ratio analysis LO A3 Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFQ for comparison purposes. LIFO inventory. LIFO cost of goods sold FIFO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities Current ratio Inventory turnover Days' sales in inventory Year 2 $ 290 870 360 810 320 345 150 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. 825 350 420 170 (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. Denominator Numerator Current ratio Inventory turnover Days' sales in inventory Year 1 $ 240 810 265 Numerator / Denominator = 0 0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Ratio 0 0 0 Ratio

Exercise 5-18 (Algo) Comparing LIFO numbers to FIFO numbers; ratio analysis LO A3 Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFQ for comparison purposes. LIFO inventory. LIFO cost of goods sold FIFO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities Current ratio Inventory turnover Days' sales in inventory Year 2 $ 290 870 360 810 320 345 150 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. 825 350 420 170 (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. Denominator Numerator Current ratio Inventory turnover Days' sales in inventory Year 1 $ 240 810 265 Numerator / Denominator = 0 0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Ratio 0 0 0 Ratio

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 63E: ( Appendix 6B) Inventory Costing Methods: Periodic Inventory System The inventory accounting records...

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( Appendix 6B) Inventory Costing Methods: Periodic Inventory System The inventory accounting records for Lee Enterprises contained the following data: Required: 1. Calculate the cost of ending inventory and the cost of goods sold using the FIFO, LIFO, and average cost methods. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 2. CONCEPTUAL CONNECTION Compare the ending inventory and cost of goods sold computed under all three methods. What can you conclude about the effects of the inventory costing methods on the balance sheet and the income statement?
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( Appendix 6B) Inventory Costing Methods: Periodic Inventory Systems. Refer to the information for Tyler Company in Brief Exercise 6-35 and assume that the company uses the periodic inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the FIFO, LIFO, and average cost methods. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest whole dollar.)
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