The following note was contained in a recent Visions Motor Company annual report:NOTE 8. INVENTORIES-AUTOMOTIVE SECTORInventories at December 31 were as follows (dollars in millions)PreviousYear$ 4,470CurrentYearRaw material, work in process, & suppliesFinished products$ 3,1966,6236,921Total inventories at FIFOLess LIFO AdjustmentTotal9,819(1,240)11,391(731)$ 8,579 $ 10,660About one-third of inventories were determined under the last-in, first-out method.Required:1. What amount of ending inventory would have been reported in the current year if Visions had used only FIFO?2. The cost of goods sold reported by Visions Motor Company for the current year was $127,129 million. Determine the cost of goodssold that would have been reported if Visions had used only FIFO for both years.3. To lower the cash outflows for taxes, which of the following should the Visions Motor management choose to use for certain of itsinventories when the costs are rising?Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3What amount of ending inventory would have been reported in the current year if Visions had used only FIFO?Note: Enter your answer in millions.Reported ending inventorymillion

It is the stock held for sale to customers. The inventory comprises of raw materials, work in…

The following note was contained in a recent Visions Motor Company annual report: NOTE 8. INVENTORIES-AUTOMOTIVE SECTOR Inventories at December 31 were as follows (dollars in millions) Previous Raw material, work in process, & supplies Finished products Current Year $ 3,196 6,623 Year $ 4,470 Total inventories at FIFO Less LIFO Adjustment 9,819 (1,240) 6,921 11,391 (731) Total $ 8,579 $ 10,660

The following note was contained in a recent Visions Motor Company annual report: NOTE 8. INVENTORIES-AUTOMOTIVE SECTOR Inventories at December 31 were as follows (dollars in millions) Previous Raw material, work in process, & supplies Finished products Current Year $ 3,196 6,623 Year $ 4,470 Total inventories at FIFO Less LIFO Adjustment 9,819 (1,240) 6,921 11,391 (731) Total $ 8,579 $ 10,660

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

The following note was contained in a recent Visions Motor Company annual report:
NOTE 8. INVENTORIES-AUTOMOTIVE SECTOR
Inventories at December 31 were as follows (dollars in millions)
Previous
Year
$ 4,470
Current
Year
Raw material, work in process, & supplies
Finished products
$ 3,196
6,623
6,921
Total inventories at FIFO
Less LIFO Adjustment
Total
9,819
(1,240)
11,391
(731)
$ 8,579 $ 10,660
About one-third of inventories were determined under the last-in, first-out method.
Required:
1. What amount of ending inventory would have been reported in the current year if Visions had used only FIFO?
2. The cost of goods sold reported by Visions Motor Company for the current year was $127,129 million. Determine the cost of goods
sold that would have been reported if Visions had used only FIFO for both years.
3. To lower the cash outflows for taxes, which of the following should the Visions Motor management choose to use for certain of its
inventories when the costs are rising?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
What amount of ending inventory would have been reported in the current year if Visions had used only FIFO?
Note: Enter your answer in millions.
Reported ending inventory
million

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