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 2 | Year 3 ||-----------------------|--------|--------|| LIFO inventory | 160 | 180 || LIFO cost of goods sold | 740 | 840 || FIFO inventory | 240 | 280 || FIFO cost of goods sold | 660 | 780 || Current assets (using LIFO) | 200 | 210 || Current assets (using FIFO) | 280 | 310 || Current liabilities | 200 | 170 |Compute its current ratio, inventory turnover, and days’ sales in inventory for Year 2 using:(a) LIFO numbers| | Numerator | Denominator | Ratio ||----------------------|-------------|-------------|-------|| Current ratio | | | || Inventory turnover | | | || Days’ sales in inventory | | | |(b) FIFO numbers| | Numerator | Denominator | Ratio ||----------------------|-------------|-------------|-------|| Current ratio | | | || Inventory turnover | | | || Days’ sales in inventory | | | |

Current ratio is one of liquidity ratio being used in business. It shows how much current assets are…

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. LITO inventory LIFO cost of goods sold FIFO inventory Year 2 $160 740 110 645 100 FIFO cest of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities 180 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. Current rabo Inventory tumover Days' sales in inventory a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers Denominator Ratio Current ratio Inventory tumover 240 660 220 300 200 Numerator Year 1 $ 110 680 b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers Denominator Ratio Numerator

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. LITO inventory LIFO cost of goods sold FIFO inventory Year 2 $160 740 110 645 100 FIFO cest of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities 180 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. Current rabo Inventory tumover Days' sales in inventory a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers Denominator Ratio Current ratio Inventory tumover 240 660 220 300 200 Numerator Year 1 $ 110 680 b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers Denominator Ratio Numerator

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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