Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

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Answer 1

Question

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

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Assume General Electric Company reports the following footnote in its 10-K report. December 31 (In millions) 2016 2015 Raw materials and work in process $5,527 $5,042 Finished goods 5,152 4,806 Unbilled shipments 333 402 11,012 10,250 Less revaluation to LIFO (697) (661) $10,315 $9,589 The company reports its inventories using the LIFO inventory costing method.Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory?

Complete the missing figures: Q15 Purchases of raw materials during that year Q16 Raw materials use in production during the year Q17 Cost of units completed during the year Q 18 Finished goods inventory Q19 Cost of units sold during the year

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Answer 2

Question

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

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Answer 3

Question

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

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Answer 4

Question

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

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Answer 5

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

Answer 6

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

Answer 7

Chapter 7, Problem 7.16E

1.

To determine

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

Answer 8

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

Answer 9

2.

To determine

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

Answer 10

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

Answer 11

3.

To determine

Explain the reason that Company F chose to us LIFO for certain inventories.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 7 - Why is inventory an important item to both...Ch. 7 - Prob. 2Q Ch. 7 - Prob. 3Q Ch. 7 - Prob. 4Q Ch. 7 - Prob. 5Q Ch. 7 - The chapter discussed tour inventory costing...Ch. 7 - Prob. 7Q Ch. 7 - Contrast the effects of LIFO versus FIFO on...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Prob. 10Q

Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

Solution Summary: The author explains that Company F's ending inventory would have been 6,829,000,000 if it had used only FIFO method. The cost of goods sold would be 113,282.

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Compute the amount of ending inventory that would have been reported in the current year if Company F uses only FIFO method.

Compute the amount of cost of goods sold that would have been reported if Company F had used only FIFO method for both years.

Explain the reason that Company F chose to us LIFO for certain inventories.

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