As of January 30, 2021, The Kroger Company (Kroger) operated, either directly or through its subsidiaries,...

 

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As of January 30, 2021, The Kroger Company ("Kroger") operated, either directly or through its subsidiaries, 2,742 supermarkets under a variety of local banner names. Kroger reported the following for the fiscal year ending January 30, 2021 (in millions of dollars): January 30, 2021 February 1, 2020 Inventory (at LIFO) $7,063 $7,084 Accumulated Earnings $23,018 $20,978 If Kroger had used the FIFO inventory valuation method, the inventory balances would have been $8,436 and $8,464 million on January 30, 2021, and February 1, 2020, respectively. Required: (5 points each) 1. If Kroger had used FIFO instead of LIFO, by how much would Accumulated Earnings (Kroger's term for "Retained Earnings“) have been higher or lower on February 1, 2020, and January 30, 2021? (Note whether Accumulated Earnings would be higher or lower and the amount for each date.) 2. Although Kroger was founded before income taxes were enacted, assume that the relevant income tax rate was 20% prior to February 1, 2020. Determine the balance in Kroger's Acc umulated Earnings account on February 1, 2020, had Kroger used FIFO instead of LIFO. 3. Assume that the relevant income tax rate increased to 30% after February 1, 2020. Determine the balance in Kroger's Accumulated Earnings account on January 30, 2021, had Kroger used FIFO instead of LIFO. 4. Kroger reported net income of $2,595 in the fiscal year ending January 30, 2021, under the LIFO method. Determine the amount of dividends that Kroger declared in the fiscal year ending January 30, 2021. 5. If Kroger had used the FIFO method of inventory accounting, determine the amount of net income that Kroger would have reported in the fiscal year ending January 30, 2021. As of January 30, 2021, The Kroger Company ("Kroger") operated, either directly or through its subsidiaries, 2,742 supermarkets under a variety of local banner names. Kroger reported the following for the fiscal year ending January 30, 2021 (in millions of dollars): January 30, 2021 February 1, 2020 Inventory (at LIFO) $7,063 $7,084 Accumulated Earnings $23,018 $20,978 If Kroger had used the FIFO inventory valuation method, the inventory balances would have been $8,436 and $8,464 million on January 30, 2021, and February 1, 2020, respectively. Required: (5 points each) 1. If Kroger had used FIFO instead of LIFO, by how much would Accumulated Earnings (Kroger's term for "Retained Earnings“) have been higher or lower on February 1, 2020, and January 30, 2021? (Note whether Accumulated Earnings would be higher or lower and the amount for each date.) 2. Although Kroger was founded before income taxes were enacted, assume that the relevant income tax rate was 20% prior to February 1, 2020. Determine the balance in Kroger's Acc umulated Earnings account on February 1, 2020, had Kroger used FIFO instead of LIFO. 3. Assume that the relevant income tax rate increased to 30% after February 1, 2020. Determine the balance in Kroger's Accumulated Earnings account on January 30, 2021, had Kroger used FIFO instead of LIFO. 4. Kroger reported net income of $2,595 in the fiscal year ending January 30, 2021, under the LIFO method. Determine the amount of dividends that Kroger declared in the fiscal year ending January 30, 2021. 5. If Kroger had used the FIFO method of inventory accounting, determine the amount of net income that Kroger would have reported in the fiscal year ending January 30, 2021.

Answer rating: 100% (QA)

Answer Amounts in Part 1 On Feb 1 2020 Accumulated Earnings would be 20978 70... View the full answer