Access the 2020 consolidated financial statements for Empire Company Limited by going to the investor relations section of the company’s website. Answer the questions below. Round percentages to one decimal point and other ratios to two decimal points. For each question, indicate where in the financial statements you found the answer, and/or provide a brief explanation. 

Required 

(a) What inventory costing method does the company use? 

(b) Now assume the following: 

(1) the company had used FIFO to cost its inventory instead of the method in (a), 

(2) costs per unit have been rising over the past few years, 

(3) the inventory at the end of 2019 and 2020 would change by 2% under FIFO. Calculate the inventory turnover (i.e., cost of sales/average inventory) and basic earnings per share both before and after the change to FIFO. Ignore income tax. 

(c) What portion of the company’s assets is inventory? What is the percentage increase or decrease in inventory from last year? 

(d) What is the company’s gross margin percentage? What is the percentage increase or decrease from last year? 

(e) Does the company eliminate intercompany transactions and unrealized profits when preparing consolidated financial statements? 

(f) What is the company’s accounting policy for its land? 

(g) What was the acquisition cost for all business acquisitions during 2019? What portion of the 2019 acquisition cost was allocated to goodwill? What two businesses were acquired in 2019? 

(h) For the business acquisitions of franchise and nonfranchise stores and retail fuel locations, describe the items typically comprising the goodwill and explain why these items are not reported separately from goodwill.