The Kroger Co. reported cash income taxes paid of $600 million for the year ended February 2, 2019 (fiscal year 2018). In addition, it reported the following:

a. What is the LIFO reserve for Kroger as of February 2, 2019? February 3, 2018?

b. What is the impact of Kroger’s decision to use LIFO on its February 2, 2019, balance sheet in terms of the effect on inventory, current assets, and total assets?

c. What is the amount of the LIFO effect for Kroger for the year ended February 2, 2019?

d. What is the impact of Kroger’s decision to use LIFO on its income statement for the year ended February 2, 2019, in terms of earnings before taxes?

e. What is the impact of Kroger’s decision to use LIFO on its cash taxes paid for the year ending February 2, 2019, assuming an effective tax rate of 21%?

Transcribed Image Text:

THE KROGER CO. CONSOLIDATED BALANCE SHEETS February 2, 2019 (In millions) ASSETS Current assets Cash and temporary cash investments Store deposits in-transit Receivables FIFO inventory LIFO reserve Assets held for sale Prepaid and other current assets Total current assets Property, plant, and equipment, net Intangibles, net Goodwill Other assets Total Assets $ 429 1,181 1,589 8,123 (1,277) 166 592 10,803 21,635 1,258 3,087 1,335 $38,118 February 3, 2018 $ 347 1,161 1,637 7,781 (1,248) 604 835 11,117 21,071 1,100 2,925 984 $37,197