Question

The following note was contained in a recent Taylor Brothers Motor Company annual report NOTE 8. INVENTORIES-AUTOMOTIVE SECTOR Inventories at December 31 were as follows (dollars in millions) Current Year Previous Year S 4.420 Raw material, work in process, & supplies Finished products S 3.076 6,663 9.739 11,311 (851 Total inventories at FIFO Less LIFO Adjustment Total S 8.449 S 10.460 About one-third of inventories were determined under the last-in, first-out method. Required: 1. What amount of ending inventory would have been reported in the current year if Taylor Brothers Motor Company had used only FIFO? (Enter your answer in millions.) million 2. The cost of goods sold reported by Taylor Brothers Motor Company for the current year was $127,239 million. Determine the cost of goods sold that would have been reported if Taylor Brothers Motor Company had used only FIFO for both years. (Enter your answer in millions.) million 3. To lower the cash outflows for taxes, which of the following should the Taylor Brothers Motor Company choose to use for certain of its inventories when the costs are rising? O LIFO O FIFO Both methods result in the same cash outflow for taxes

Answer 1

The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation and format. For detailed answers refer to the supporting sheets.

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