LIFO

rate of 35%. 1. Which cost flow assumptions does Dow Chemical use to value its inventories? Inventories are stated at the lower of cost or market. The method of determining cost for each subsidiary varies among LIFO, FIFO, and average cost. What is the value of inventories that

words, Jim is seeking for a tax saving. It can be explain by using the contracting perspective where manager will choose accounting techniques that will maximizes his or her utility at the expenses and also maximize bonuses. Furthermore, by creating LIFO inventory layer adjustment it will give lower reported earnings. If the company can avoid the inventory increase for the year and instead having a reduction, they can take a credit adjustment to cost of sale and increase their profit. Under literature

perhaps the best entities to examine when attempting to understand inventory management systems. The type of inventory a company has determines the method they use. Retail companies use the retail inventory method as a base system. Last-in-First-Out (LIFO) and First-in-First-Out (FIFO) are the two systems that appear to be used more

QUESTION 1 (i) AGENCY COSTS IN DEBT CONTRACTING The agency theory examines the relationship between the principle and agent under the assumption that that individuals act in their own self-interest in order to maximise their personal wealth. This conflict of interest creates agency costs that are borne by the principle. The agency problem is apparent in debt contacting relationships where the firm is assumed to be acting in the interests of its shareholders when borrowing money from the debt holders

pharmacies using the retail inventory method and in distribution centers using the FIFO cost method.” (Annual Report Archive) Walgreens on the other hand only focuses on one inventory method. Walgreens uses the Last- In, First-Out (LIFO) method for the entire business. In the LIFO method items bought last are sold first, which also means that the items still in stock are the oldest ones. Walgreens focuses in the method because it limits lower of cost or market approach, but not better than weighted average

Inventory Systems Summary Planning and Forecasting is a vital function of management especially as it is related to inventory management. Planning has four processes associated with it. They are establishing goals, formulating strategies, implementing the plan and evaluating its success. The planning process of inventory will assist the organization choose the correct inventory system resulting in reduced costs and increased efficiency. For any business, having large amounts of inventory could prove

Nash-Finch Company and Subsidiaries Inventory Analysis ACCT 6610/5610 1. Download a copy of Nash-Finch Company and Subsidiaries 2012 10-K filed with the SEC on February 28, 2013. You do not need to hand the 10-K in with your assignment, but you will refer to it in answering the questions below. 2. What does Nash-Finch do? Nash-Finch was established in 1885 and incorporated in 1921. They are the largest food distributor servicing military commissaries and exchanges in the US (in terms

income (LIFO)+Increase in LIFO reserve x (1-effective tax rate) 70,190.1 = 67,880 + 3,554 (1-0.35) If Whole Foods Market changed to use FIFO method, the net income will be $70,190,100 f) Assume that Whole Foods Market 's inventory balances for accounting and for tax purposes are the same. Estimate the cumulative tax savings through September 30,2001 that Whole Foods Market has made by using the LIFO method of inventory costing instead of the FIFO method. Answer LIFO reserve

Regulating Inventory – An Examination of AASB 102 “Inventories” Inventories are in essence what organisations hold with an intention to sell, however directly or indirectly. For most businesses, this is how their profits are made, and it is reasonable to assume that these items account for much of an organisation’s activities. Such a big influence on indicators of financial performance and position warrants an equally large need for regulation to ensure that users of the financial statements are

Introduction Inventories are those asset items which are either used for the production of goods to be sold or used directly for the purpose of sales. It is a major portion of current assets and thus there is need to do careful investment in the same. Different kind of companies has different forms of inventory. For example; a company that is into direct selling of readymade goods will have only merchandise inventory in their accounts while the manufacturing companies will have inventory in three