Question

The inventories disclosure note in the 2014 financial statements for SUPERVALU Inc., one of the largest grocery chains in the United States, included the following ($ in millions):

"Inventories are valued at the lower of cost or market. Substantially all of the Company's inventory consists of finished goods. As of February 22, 2014 and February 23, 2013, approximately 57 percent and 60 percent, respectively, of the Company's inventories were valued under the LIFO method. If the FIFO method had been used to determine cost of inventories for which the LIFO method is used, the Company's inventories would have been higher by approximately $202 and $211 as of February 22, 2014 and February 23, 2013, respectively."

Cost of goods sold for the fiscal year ended February 22, 2014 was $14,623 million.

Question:

If SUPERVALU had used FIFO for all of its LIFO inventories, what would its cost of goods sold have been for 2014?

Answer 1

Cost of Good Sold under FIFO = Cost of good sold under LIFO - Change in LIFO Reserve
Cost of Good Sold under FIFO = $14,623 million - (211-202)	14614	Millions
COGS under LIFO > COGS under FIFO
(End Lifo reserve - Bgn Lifo reserve) = Change in Lifo Reserve