Question

Suppose this information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation for a recent year. General Motors uses the LIFO inventory method.
Beginning inventory.....$ 13,921
Ending inventory.......14, 939
LIFO reserve.........1, 423
Current assets.........60,135
Current liabilities.......70, 308
Cost of goods sold.....166,259
Sales revenue.......178,199
Instructions
(a) Calculate the inventory turnover and days in inventory.
(b) Calculate the current ratio based on inventory as reported using LIFO.
(c) Calculate the current ratio after adjusting for the LIFO reserve.
(d) Comment on any difference between parts (b) and (c).



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  • CreatedApril 07, 2014
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