10. Hands-On Financial Statement interpretation: 20 points Rite Aid Corporation is a pharmacy/drug store chain around the country. I have provided a partial excerpt from their most recent annual report for fiscal year (FY) 2020, including 2 footnote disclosures: RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) February 29, 2020 March 2, 2019 S 218,180 1,286,785 1,921,604 181.794 144,353 1,788,712 1,871,941 179,132 117,581 4,101,719 92.278 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net Inventories, net Prepaid expenses and other current assets Current assets held for sale Total current assets Property, plant and equipment, net Operating lease right-of-use assets Goodwill Other intangibles.net Deferred tax assets Other assets Total assets FOOTNOTE DISCLOSURE: Inventory 1,308,514 3,700,641 1,215,838 2,903,256 1,108,136 359.491 16,680 148,327 9,452.369 1,108,136 448,706 409,084 215,208 7,591,367 At February 29, 2020 and March 2, 2019, inventories were $539,640 and $604,444, respectively, lower than the amounts that would have been reported using the first-in, first-out ("FIFO") cost flow assumption. During fiscal 2020, 2019 and 2018, a reduction in inventories resulted in the liquidation of LIFO inventory quantities carried at lower costs in prior years. This LIFO liquidation resulted in a $14,449, $5,884 and $2,707 cost of goods sold decrease. Based on the information provided, please answer these 3 questions, 4 points each: a. What is the LIFO Reserve for FY 2020? b. In 2020, they reported Cost of Goods Sold Expense of 17,201,635. Calculate Cost of Goods Sold for 2020 if they had used FIFO? Show your calculations c. In 2020, they reported Cost of Goods Sold Expense of 17,201,635. What would the Cost of Goods Sold value be if they did not have the LIFO liquidation mentioned in the footnote above? Footnote Disclosure: Accounts Receivable The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. The allowance for uncollectible accounts at February 29, 2020 and March 2, 2019 was $12,849 and $13,106 respectively. 5 10. Hands-On Financial Statement interpretation: 20 points Rite Aid Corporation is a pharmacy/drug store chain around the country. I have provided a partial excerpt from their most recent annual report for fiscal year (FY) 2020, including 2 footnote disclosures: RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) February 29, 2020 March 2, 2019 S 218,180 1,286,785 1,921,604 181.794 144,353 1,788,712 1,871,941 179,132 117,581 4,101,719 92.278 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net Inventories, net Prepaid expenses and other current assets Current assets held for sale Total current assets Property, plant and equipment, net Operating lease right-of-use assets Goodwill Other intangibles.net Deferred tax assets Other assets Total assets FOOTNOTE DISCLOSURE: Inventory 1,308,514 3,700,641 1,215,838 2,903,256 1,108,136 359.491 16,680 148,327 9,452.369 1,108,136 448,706 409,084 215,208 7,591,367 At February 29, 2020 and March 2, 2019, inventories were $539,640 and $604,444, respectively, lower than the amounts that would have been reported using the first-in, first-out ("FIFO") cost flow assumption. During fiscal 2020, 2019 and 2018, a reduction in inventories resulted in the liquidation of LIFO inventory quantities carried at lower costs in prior years. This LIFO liquidation resulted in a $14,449, $5,884 and $2,707 cost of goods sold decrease. Based on the information provided, please answer these 3 questions, 4 points each: a. What is the LIFO Reserve for FY 2020? b. In 2020, they reported Cost of Goods Sold Expense of 17,201,635. Calculate Cost of Goods Sold for 2020 if they had used FIFO? Show your calculations c. In 2020, they reported Cost of Goods Sold Expense of 17,201,635. What would the Cost of Goods Sold value be if they did not have the LIFO liquidation mentioned in the footnote above? Footnote Disclosure: Accounts Receivable The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. The allowance for uncollectible accounts at February 29, 2020 and March 2, 2019 was $12,849 and $13,106 respectively. 5