Ace Hardware Corporation has two types of inventory: wholesale and retail. The following are the data for wholesale inventory from the company’s 2023 annual report. Note: All data are in $ millions.

For Year ending: 12/30/2023 12/30/2022

Wholesale revenue $6,473.4 $6,123.4

Wholesale cost of revenue $5,976.5 $5,707.4

As of 12/30/2023 12/30/2022

Wholesale inventory (LIFO basis) $862.7 $898.3

The annual report has the following note on inventory: “Wholesale inventories are valued on the LIFO method. The excess of replacement cost over the LIFO value of inventory was $111.2 million and $98.7 million on December 30, 2023, and December 30, 2022, respectively.”

a. Using the above data, complete the information requested below for Ace’s wholesale inventory. Note: Write your answers in millions of dollars, e.g., $862.7

1. Wholesale inventory value as of 12/30/2023 re-measured under FIFO method:

2. Wholesale inventory value as of 12/30/2022 re-measured under FIFO method:

3. Wholesale cost of revenue for 2023 remeasured under FIFO method:

b. Calculate the company’s 2023 gross profit margin, inventory turnover, and days inventory using the LIFO data as reported as well as the re-measured FIFO data computed above in part a.

Using LIFO data as reported:

Gross profit margin:

Inventory turnover:

Days Inventory:

Using re-measured FIFO values:

Gross profit margin:

Inventory turnover:

Days Inventory:

Answer rating: 100% (QA)

Lets solve this step by step a Remeasuring Wholesale Inventory under FIFO Method To remeasure the wholesale inventory under the FIFO method we need to ... View the full answer