inventory turnovermine the effect of theerve on current ratio.PE6-11 Deere & Company is a global manufacturer and distributor of agricultural, con-struction, and forestry equipment. Suppose it reported the following information in its2014 annual report.Exercises(in millions)20142013Inventories (LIFO)$ 2,39730,85712,7531,36716,255$3,042Current assetsCurrent liabilitiesLIFO reserveCost of goods soldInstructions(a) Compute Deere's inventory turnover and days in inventory for 2014.(b) Compute Deere's current ratio using the 2014 data as presented, and then again afteradjusting for the LIFO reserve.

The ratios are calculated by the companies to make the financial analysis. It tells about the…

Ene the effect of the e on current ratio. E6-11 Deere & Company is a global manufacturer and distributor of agricultural, con- struction, and forestry equipment. Suppose it reported the following information in its 2014 annual report. Exercis (in millions) 2014 2013 Inventories (LIFO) Current assets Current liabilities LIFO reserve $ 2,397 30,857 12,753 1,367 16,255 $3,042 Cost of goods sold Instructions (a) Compute Deere's inventory turnover and days in inventory for 2014. (b) Compute Deere's current ratio using the 2014 data as presented, and then again after adiusting for the I IEO

Ene the effect of the e on current ratio. E6-11 Deere & Company is a global manufacturer and distributor of agricultural, con- struction, and forestry equipment. Suppose it reported the following information in its 2014 annual report. Exercis (in millions) 2014 2013 Inventories (LIFO) Current assets Current liabilities LIFO reserve $ 2,397 30,857 12,753 1,367 16,255 $3,042 Cost of goods sold Instructions (a) Compute Deere's inventory turnover and days in inventory for 2014. (b) Compute Deere's current ratio using the 2014 data as presented, and then again after adiusting for the I IEO

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 12P: Dollar-Value LIFO Kwestel Company adopted the dollar-value LIFO method for inventory valuation at...

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Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?
LIFO and Inventory Pools On January 1, 2016, Grover Company changed its inventory cost flow method to the LIFO cost method from the FIFO cost method for its raw materials inventory. It made the change for both financial statement and income tax reporting purposes. Grover uses the multiple-pools approach under which it groups substantially identical raw materials into LIFO inventory pools. It uses weighted average costs in valuing annual incremental layers. The composition of the December 31, 2018, inventory for the Class F inventory pool is as follows: Inventory transactions for the Class F inventory pool during 2019 were as follows: On March 2, 2019, 4,800 units were purchased at a unit cost of 13.50 for 64,800. On September 1, 2019, 7,200 units were purchased at a unit cost of 14.00 for 100,800. A total of 15,000 units were used for production during 2019. The following transactions for the Class F inventory pool took place during 2020: On January 11, 2020, 7,500 units were purchased at a unit cost of 14.50 for 108,750. On May 14, 2020, 5,500 units were purchased at a unit cost of 15.50 for 85,250. On December 29, 2020, 7,000 units were purchased at a unit cost of 16.00 for 112,000. A total of 16,000 units were used for production during 2020. Required: 1. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2019. Show supporting computations in good form. 2. Prepare a schedule to compute the cost of Class F raw materials used in production for the year ended December 31, 2019. 3. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2020. Show supporting computations in good form.
Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following data: Required: 1. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the FIFO inventory costing method. Be sure to explain what each ratio means. 2. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the LIFO inventory costing method. Be sure to explain what each ratio means. 3. CONCEPTUAL CONNECTION Which ratios-the ones computed using FIFO or LIFO inventory values-provide the better indicator of how successful McLelland was at managing and controlling its inventory?
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