Mannisto Incorporated uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $292,917 and average assets of $1,543,190. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $32,670 more than under FIFO, and its average assets would have been $30,100 less then under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). b. Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $338,157 and $1,874,860, respectively. If LIFO had been used through the years, inventory values would have been $44,160 less than under FIFO, and current year cost of goods sold would have been $24,987 less than under FIFO. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). Note: For all requirements, enter your answers as percentages rounded to 1 decimal place (1.e., 12.2%). Answer is complete but not entirely correct. FIFO LIFO ROI 19.06 17.2 b. ROI 18.0 % 15.90

Mannisto Incorporated uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $292,917 and average assets of $1,543,190. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $32,670 more than under FIFO, and its average assets would have been $30,100 less then under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). b. Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $338,157 and $1,874,860, respectively. If LIFO had been used through the years, inventory values would have been $44,160 less than under FIFO, and current year cost of goods sold would have been $24,987 less than under FIFO. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). Note: For all requirements, enter your answers as percentages rounded to 1 decimal place (1.e., 12.2%). Answer is complete but not entirely correct. FIFO LIFO ROI 19.06 17.2 b. ROI 18.0 % 15.90

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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