The LIFO Inventory Reserve Waterloo Manufacturing Company uses the LIFO inventory costing method to value its ending inventory. The following data were obtained from the company's accounting records for the year: -yi mes ne FL Current assets (under FIFO) $18,000,000 Current liabilities 15,500,000 Inventory under LIFO 7,000,000 7,700,000 Inventory under FIFO Pri Calculate the company's (a) LIFO inventory reserve and (b) current ratio assuming (0) FIFO and (ii) LIFO. If the company's LIFO gross profit was $10,000,000 and the change in the LIFO inventory reserve from the prior year to the current year was $1,200,000 calculate the company's gross profit under FIFO. Round current ratio to two decimal points a LIFO inventory reserve $1,200,000 * FIFO 1.33 X b. Current ratio Gross profit under FIFO- $ 11,400,000 x LIFO 1.25 x

The LIFO Inventory Reserve Waterloo Manufacturing Company uses the LIFO inventory costing method to value its ending inventory. The following data were obtained from the company's accounting records for the year: -yi mes ne FL Current assets (under FIFO) $18,000,000 Current liabilities 15,500,000 Inventory under LIFO 7,000,000 7,700,000 Inventory under FIFO Pri Calculate the company's (a) LIFO inventory reserve and (b) current ratio assuming (0) FIFO and (ii) LIFO. If the company's LIFO gross profit was $10,000,000 and the change in the LIFO inventory reserve from the prior year to the current year was $1,200,000 calculate the company's gross profit under FIFO. Round current ratio to two decimal points a LIFO inventory reserve $1,200,000 * FIFO 1.33 X b. Current ratio Gross profit under FIFO- $ 11,400,000 x LIFO 1.25 x

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Description: The LIFO Inventory Reserve Waterloo Manufacturing Company uses the LIFO inventory costing method to value its ending inventory. The following data wereobtained from the company's accounting records for the year:y₁metnesFiPrCurrent assets (under FIFO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

The LIFO Inventory Reserve Waterloo Manufacturing Company uses the LIFO inventory costing method to value its ending inventory. The following data were
obtained from the company's accounting records for the year:
y₁
met
nes
Fi
Pr
Current assets (under FIFO) $18,000,000
Current liabilities
15,500,000
7,000,000
7,700,000
Inventory under LIFO.
Inventory under FIFO
Calculate the company's (a) LIFO inventory reserve and (b) current ratio assuming (i) FIFO and (i) LIFO, If the company's LIFO gross profit was $10,000,000 and the
change in the LIFO inventory reserve from the prior year to the current year was $1,200,000 calculate the company's gross profit under FIFO.
Round current ratio to two decimal points
a LIFO inventory reserves 1,200,000 *
FIFO
b. Current ratio
1.33 X
Gross profit under FIFO- $ 11,400,000 *
LIFO
1,25 x

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