Chapter 10, Problem 1FSC

a.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumptions can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, so that comparisons across companies can be made. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

The cash flow assumptions that KCC uses.

b.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumptions can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, so that comparisons across companies can be made. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

The KC LIFO reserve at the end of 2017, 2018, and 2019.

c.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumptions can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, so that comparisons across companies can be made. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

The balance of ending inventory in 2017, 2018, and 2019 when KC will use the FIFO cash flow assumption.

d.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumptions can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, so that comparisons across companies can be made. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

The KC cost of goods under FIFO in 2018 and 2019.

e.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumptions can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, so that comparisons across companies can be made. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

KC gross profit, taxes and net income is higher or lower under FIFO in 2018 and 2019.

f.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumptions can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, so that comparisons across companies can be made. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

Compare KC’s gross profit percentage, inventory turnover ratio, and days in inventory on hand under LIFO versus FIFO for 2018 and 2019.

g.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumption can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, in order to make useful comparisons across companies. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

The cash flow assumptions that P&G uses.

h.

To determine

Concept Introduction:

LIFO to FIFO conversion: Comparison of different cost assumption can be difficult; however, users can convert inventory and cost of goods sold amounts from LIFO to FIFO, in order to make useful comparisons across companies. The change in the LIFO reserve or LIFO effect can be used in converting the cost of goods sold from LIFO to FIFO.

The comparison of KC and P&G’s inventory turnover ratio and days in inventory on hand under FIFO for 2019.