Chapter 10, Problem 10.2E

Moving Average, FIFO, LIFO, Presentation, and Disclosures. Answer the following questions using the information provided in E10-1:

Required

1. a. Prepare a partial income statement and balance sheet for Arthur Lloyd under each of the inventory valuation methods.
2. b. Assume that the company reported current assets (without inventory) of $2,890,000 at the beginning of the year and $2,100,000 at the end of the year. Also assume that it reports current liabilities of $2,000,150 and $2,450,000 at the beginning and end of the year, respectively. Compute the current ratio and inventory turnover ratio under each of the inventory valuation methods. The inventory turnover ratio is required only for the end of the period.