Inventory transactions for Jack Franklin Stores are summarized in the following table. The company uses the...

 

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Inventory transactions for Jack Franklin Stores are summarized in the following table. The company uses the LIFO perpetual method for both financial and tax reporting. Transaction Units Sales in Units Unit Cost Total Cost Beginning inventory: January 1 Oldest cost 2,000 Next oldest cost 1,750 Total beginning inventory 3,750 $5 $ 10,000 8 14,000 $ 24,000 Purchases January 20 5,000 February 18 12,500 Subtotal 21,250 9 45,000 11 137,500 $206,500 Units sold on May 1 at $18 19,000 July 28 18,750 10 187,500 Total available for sale 40,000 $394,000 Total units sold (19,000) Ending inventory 21,000 The inventory footnote from Jack Franklin Stores' annual report indicates that the difference between the LIFO costs and the current (FIFO) costs of inventory is equal to $0 and $12,750 at the beginning and end of the year, respectively. Required >> a. Determine the ending inventory and cost of goods sold for the current year. b. Use the footnote information provided in the question to convert the beginning and ending inventories from a LIFO to a FIFO basis. c. Convert the cost of goods sold for the current year from the LIFO to the FIFO basis. d. Compare the inventory turnover ratio for the current year computed under the two methods of inventory valuation. Inventory transactions for Jack Franklin Stores are summarized in the following table. The company uses the LIFO perpetual method for both financial and tax reporting. Transaction Units Sales in Units Unit Cost Total Cost Beginning inventory: January 1 Oldest cost 2,000 Next oldest cost 1,750 Total beginning inventory 3,750 $5 $ 10,000 8 14,000 $ 24,000 Purchases January 20 5,000 February 18 12,500 Subtotal 21,250 9 45,000 11 137,500 $206,500 Units sold on May 1 at $18 19,000 July 28 18,750 10 187,500 Total available for sale 40,000 $394,000 Total units sold (19,000) Ending inventory 21,000 The inventory footnote from Jack Franklin Stores' annual report indicates that the difference between the LIFO costs and the current (FIFO) costs of inventory is equal to $0 and $12,750 at the beginning and end of the year, respectively. Required >> a. Determine the ending inventory and cost of goods sold for the current year. b. Use the footnote information provided in the question to convert the beginning and ending inventories from a LIFO to a FIFO basis. c. Convert the cost of goods sold for the current year from the LIFO to the FIFO basis. d. Compare the inventory turnover ratio for the current year computed under the two methods of inventory valuation.

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a Ending Inventory for the current year Ending Inventory Total Cost Cost of Goods Sold Ending Invent... View the full answer