Question

5401 Analyzing Inventory Disclosure Comparing LIFO and FIFO The current asset section of the 2014 and 2013 fiscal year end balance sheets of The Kroger Co. are presented in the accompanying table: January 31, February 1. S millions 2015 2014 Current assets Cash and temporary cash investments Deposits in transit 988 958 Receivables 1.200 1,116 FIFO inventory 6,933 6.801 LIFO Credit (1.150) Prepaid and other current assets 704 Total current assets $8,911 58,830 In addition, Kroger provides the following footnote describing its inventory accounting policy (assume the following is their complete disclosure): 701 Inventories are stated at the lower of cost (principally on a LIFO basis) or market. In total, approximately 95% of inventories in 2014 and 2013 were valued using the LIFO method. Cost for the balance of the inventories, including substantially all fuel inventories, was determined using the FIFO method. Replacement cost was higher than the carrying amount by $1,245 million at January 31, 2015 and $1,150 million at February 1, 2014. We follow the Link Chain, Dollar.Value LIFO method for purposes of calculating our LIFO charge or credit.

Answer 1

solution to given information will fino January 31, February 1, 2015 I 2014 FIFO Inventory LIFO credit $6,933 milion $6,801 million $(1,845) $ (1,150) million $ million @ Icroger report it's inventary 2015, balance sheet n Particulars FI FO Inventory LIFO Credito in it's Januarysi, g Amount =) (million) 6,93 (1.945) LIFO inventory 5,688 6 the cumulative effect (through January 31,2015) of the use of LIFO is to decrease the comulative fetar earnings by $1,245 millim o comulative tam saving's from i n LIFO = on LIFO reserve x Rate Of Todd - $ 1,QUS X35% - $435.75 million,

& reserue X (1- 6X (1-Tourate FIFO het earning's = LIFO et ALIFO o earnings = $1,728 + ((1.245 - 1,150) x(1-35%)) - $ 1,428+ (95x65%) = $1,728+ $61.75 = $$ 1,789.75 million @ Inventory Turnover $85, 12 ille (LIFO) 09 (6933-1Qu5)+ 6.801-1150)] Le conseil jedn a $ 85,512 . $150.83 $ 566.95 FIFO COGS = LIFO COGS - A LIFO reserve = $85,512 - ($1Qu5 - $1150) - $85,417 FIFO enventory Turnover - $85.417 Ta 6933 + 86801 - 6 19.44
hhi...i tried my level best..if you have any doubt please comment me..thank you