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Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. Year 1 Year 2 $ 160 LIFO inventory LIFO Cost of goods sold FIFO inventory FIFO COst of goods sold Current assets (using LIFO) Current assets (using FIFO) $ 110 740 680 240 110 660 645 220 180 300 180 Current liabilities 200 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. IDenominator Numerator Ratio Current ratio 1.2 to 1 220.0 Inventory turnover $ 740.0 0 Days' sales in inventory 160.0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Numerator Denominator Ratio Current ratio $ 300.0 0 Inventory turnover 660.0 $ 0 Days' sales in inventory 240.0 $ 0

Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. Year 1 Year 2 $ 160 LIFO inventory LIFO Cost of goods sold FIFO inventory FIFO COst of goods sold Current assets (using LIFO) Current assets (using FIFO) $ 110 740 680 240 110 660 645 220 180 300 180 Current liabilities 200 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. IDenominator Numerator Ratio Current ratio 1.2 to 1 220.0 Inventory turnover $ 740.0 0 Days' sales in inventory 160.0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Numerator Denominator Ratio Current ratio $ 300.0 0 Inventory turnover 660.0 $ 0 Days' sales in inventory 240.0 $ 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. Year 1 Year 2 $ 160 LIFO inventory LIFO Cost of goods sold FIFO inventory FIFO COst of goods sold Current assets (using LIFO) Current assets (using FIFO) $ 110 740 680 240 110 660 645 220 180 300 180 Current liabilities 200 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. IDenominator Numerator Ratio Current ratio 1.2 to 1 220.0 Inventory turnover $ 740.0 0 Days' sales in inventory 160.0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Numerator Denominator Ratio Current ratio $ 300.0 0 Inventory turnover 660.0 $ 0 Days' sales in inventory 240.0 $ 0
Transcribed Image Text:Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. Year 1 Year 2 $ 160 LIFO inventory LIFO Cost of goods sold FIFO inventory FIFO COst of goods sold Current assets (using LIFO) Current assets (using FIFO) $ 110 740 680 240 110 660 645 220 180 300 180 Current liabilities 200 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. IDenominator Numerator Ratio Current ratio 1.2 to 1 220.0 Inventory turnover $ 740.0 0 Days' sales in inventory 160.0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Numerator Denominator Ratio Current ratio $ 300.0 0 Inventory turnover 660.0 $ 0 Days' sales in inventory 240.0 $ 0
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