Warner Borg Incorporated is a leading global supplier of highly engineered automotive systems and components primarily for powertrain applications. The following note was contained in its recent annual report: NOTE 3. INVENTORIES, NET as of December 31 (in millions) Raw materials and supplies Work in progress Finished goods FIFO inventories LIFO reserve Total inventories, net Current Year Prior Year $ 361.3 $ 321.6 111.8 100.8 140.2 141.0 613.3 563.4 (28.3) (25.5) $ 585.0 $ 537.9 Required: 1. What amount of ending inventory would have been reported in the current year if Warner Borg had used only FIFO? 2. The cost of goods sold reported by Warner Borg for the current year was $7,502.5 million. Determine the cost of goods sold that would have been reported if Warner Borg had used only FIFO for both years. 3. To lower the cash outflows for taxes, which of the following should the Warner Borg 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 The cost of goods sold reported by Warner Borg for the current year was $7502.5 million. Determine the cost of goods sold that would have been reported if Warner Borg had used only FIFO for both years. Note: Enter your answer in millions rounded to 1 decimal place. Cost of goods sold million < Required 1 Required 3 >
Warner Borg Incorporated is a leading global supplier of highly engineered automotive systems and components primarily for powertrain applications. The following note was contained in its recent annual report: NOTE 3. INVENTORIES, NET as of December 31 (in millions) Raw materials and supplies Work in progress Finished goods FIFO inventories LIFO reserve Total inventories, net Current Year Prior Year $ 361.3 $ 321.6 111.8 100.8 140.2 141.0 613.3 563.4 (28.3) (25.5) $ 585.0 $ 537.9 Required: 1. What amount of ending inventory would have been reported in the current year if Warner Borg had used only FIFO? 2. The cost of goods sold reported by Warner Borg for the current year was $7,502.5 million. Determine the cost of goods sold that would have been reported if Warner Borg had used only FIFO for both years. 3. To lower the cash outflows for taxes, which of the following should the Warner Borg 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 The cost of goods sold reported by Warner Borg for the current year was $7502.5 million. Determine the cost of goods sold that would have been reported if Warner Borg had used only FIFO for both years. Note: Enter your answer in millions rounded to 1 decimal place. Cost of goods sold million < Required 1 Required 3 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Warner Borg Incorporated is a leading global supplier of highly engineered automotive systems and components primarily for
powertrain applications. The following note was contained in its recent annual report:
NOTE 3. INVENTORIES, NET
as of December 31 (in millions)
Raw materials and supplies
Work in progress
Finished goods
FIFO inventories
LIFO reserve
Total inventories, net
Current Year Prior Year
$ 361.3
$ 321.6
111.8
100.8
140.2
141.0
613.3
563.4
(28.3)
(25.5)
$ 585.0
$ 537.9
Required:
1. What amount of ending inventory would have been reported in the current year if Warner Borg had used only FIFO?
2. The cost of goods sold reported by Warner Borg for the current year was $7,502.5 million. Determine the cost of goods sold that
would have been reported if Warner Borg had used only FIFO for both years.
3. To lower the cash outflows for taxes, which of the following should the Warner Borg 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
The cost of goods sold reported by Warner Borg for the current year was $7502.5 million. Determine the cost of goods sold
that would have been reported if Warner Borg had used only FIFO for both years.
Note: Enter your answer in millions rounded to 1 decimal place.
Cost of goods sold
million
< Required 1
Required 3 >
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