Analyzing the Impact on Ratios from Changing Inventory Prices

Consider two companies that are identical except for the way they value inventory. One company uses FIFO $($Company F$),$ while the other uses LIFO $($Company L$).$ Assume prices are rising in the markets in which these companies buy materials. Indicate for each ratio below which company $($Company F$,$ Company L$,$ or neither$)$ will have the larger ratio value. Determining Merchandise to Be Included or Excluded from Ending Inventory

The unadjusted inventory balance of Ann Corp. is $\backslash (\backslash$$ $600,000\backslash )$ on December $31$ based on a physical inventory count. The following items must be considered before the inventory valuation is finalized.

a$.$ On December $31,$ the physical inventory excluded $\backslash (\backslash$$ $600\backslash )$ of merchandise inventory shipped to Ann Corp. from a vendor f$.$o$.$b$.$ destination that arrived on January $1$ of the following year.

b$.$ On December $31,$ the physical inventory included $\backslash (\backslash$$ $21,600\backslash )$ of merchandise inventory held on consignment by a customer. Ann Corp. is the consignor.

c$.$ On December $31,$ the physical inventory included $\backslash (\backslash$$ $960\backslash )$ of merchandise held on consignment. The consignor is Ann's largest vendor.

d$.\backslash (\backslash$$ $21,600\backslash )$ of in$-$transit merchandise was shipped f$.$o$.$b$.$ shipping point to a customer and was excluded from the physical inventory count. The merchandise was shipped on December $28$ and is expected to arrive at the customer on December $31.$

e$.$ Goods are in transit from a vendor to Ann on December $31.$ The invoice cost was $\backslash$$$14,400,$ and the goods were shipped f$.$o$.$b$.$ shipping point on December $28.$ The merchandise was excluded from the physical inventory count because they had not been delivered.

f$.$ Merchandise with a cost of $\backslash (\backslash$$ $360\backslash )$ is being held in the receiving department for return. The merchandise was excluded from the physical inventory count.

Required

Review items a through f and determine the adjusted inventory balance for year$-$end December $31.$

Adjusted inventory balance on December $31$: $\backslash$$