d. Kroger reported net earnings of $1,728 million in its fiscal year 2014 income statement. Assuming a 35% tax rate, what amount of net earnings would Kroger report if the company used the FIFO inventory costing method? Analyzing Inventory Disclosure Comparing LIFO and FIFOThe current asset section of the 2014 and 2013 fiscal year end balance sheets of The Kroger Co. are presented in the accompanying table:January 31, February 1,$ millions20152014Current assetsCash and temporary cash investments$268$401Deposits in-transit988958Receivables1,2661,116FIFO inventory6,9336,801LIFO reserve(1,245)(1,150)Prepaid and other current assets701704Total current assets$8,911$8,830In addition, Kroger provides the following footnote describing its inventory accounting policy (assume the following is their complete disclosure):Inventories are stated at the lower of cost (principally on a LIFO basis) or market. In total, approximately 95% of inventories in 2014 and 2013 were valued using the LIFO method. Cost for the balance of the inventories, includingsubstantially all fuel inventories, was determined using the FIFO method. Replacement cost was higher than the carrying amount by $1,245 million at January 31, 2015 and $1,150 million at February 1, 2014. We follow the Link-Chain,Dollar-Value LIFO method for purposes of calculating our LIFO charge or credit.

Name: d. Kroger reported net earnings of $1,728 million in its fiscal year 2
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Description: d. Kroger reported net earnings of $1,728 million in its fiscal year 2014 income statement. Assuming a 35% tax rate, what amount of net earnings would Kroger report if the company used the FIFO inventory costing method? Analyzing Inventory Disclosure

Inventory valuation refers to a technique that is used to find out the value of the ending…

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Kroger reported net earnings of $1,728 million in its fiscal year 2014 income statement. Assuming a 35% tax rate, what amount of net earnings would Kroger report if the company used the FIFO inventory costing method?

Kroger reported net earnings of $1,728 million in its fiscal year 2014 income statement. Assuming a 35% tax rate, what amount of net earnings would Kroger report if the company used the FIFO inventory costing method?

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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