Costco Wholesale Corporation operates membership warehouses. As of August 30, 2015 Costco operated 686 warehouses, with 480
Question:
Costco Wholesale Corporation operates membership warehouses. As of August 30, 2015 Costco operated 686 warehouses, with 480 in the United States.
In addition, the store sells merchandise through its website costco.com. Using selected parts of Costco’s 2015 10-K report, answer the questions below. (The year 2015 refers to the year ending August 30, 2015. The effective tax rate is 33.2 percent.)
Required
1. Was 2015 a good year or a bad year for Costco Corporation? Why?
2. Costco Corporation accounts for its U.S. inventory and the related cost of goods sold using the last-in, first-out (LIFO) method. Inventory is stated at the lower of LIFO cost or market. The cumulative LIFO inventory reserve was \($82\) million and \($109\) million at year-end 2015 and 2014, respectively. Estimate the income before income taxes in 2015 assuming the company used FIFO to value its inventory.
Step by Step Answer:
Financial Accounting For Executives And MBAs
ISBN: 9781618531988
4th Edition
Authors: Wallace, Simko, Ferris