Question: John Martinson, CFA, is an equity analyst with a large pension fund. His supervisor, Linda Packard, asks him to write a report on Karp Inc.

John Martinson, CFA, is an equity analyst with a large pension fund. His supervisor, Linda Packard, asks him to write a report on Karp Inc. Karp prepares its financial statements in accordance with U.S. GAAP. Packard is particularly interested in the effects of the companys use of the LIFO method to account for its inventory. For this purpose, Martinson collects the financial data presented in Exhibits F and G. EXHIBIT F Balance Sheet Information (US$ millions)As of 31 December20092008Cash and cash equivalents172157Accounts receivable626458Inventories620539Other current assets12565Total current assets1,5431,219Property and equipment, net3,0352,972Total assets4,5784,191Total current liabilities1,4951,395Long-term debt644604

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