Chess Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes.
| 2011 | 2010 |
LIFO inventory | $150 | $100 |
LIFO cost of goods sold | 730 | 670 |
FIFO inventory | 220 | 125 |
FIFO cost of goods sold | 685 | — |
Current assets (using LIFO) | 210 | 180 |
Current liabilities | 190 | 170 |
1. Compute its current ratio, inventory turnover, and days’ sales in inventory for 2011 using (a) LIFO numbers and (b) FIFO numbers. (Round answers to one decimal.)
2. Comment on and interpret the results of part 1.
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