The following information is taken from Blue Company’s financial statements (amo
ID: 2711237 • Letter: T
Question
The following information is taken from Blue Company’s financial statements (amounts in thousands): 12/31/2012 12/31/2011 Inventory at LIFO $219,686 $241,154 Cost of goods sold 754,661 675,138 Stockholders’ Equity 242,503 242,712 Net Income 31,185 64,150 Tax rate 35% 35% Inventory Footnote: If the first-in, first-out method of accounting for inventory had been used, inventory would have been approximately $26,900 (thousands) and $25,100 (thousands) higher than reported at 12/31/2012 and 12/31/2011, respectively. Use the information above to answer the following: a. Calculate what inventory would have been at 12/31/2012 and 12/31/2011 had the FIFO inventory method been used. b. What would net income for the year ended 12/31/2012 have been if the FIFO inventory method been used? c. Calculate what stockholders' equity would have been at 12/31/2012 and 12/31/2011 had the FIFO inventory method been used.
Explanation / Answer
Answer:
a) 12/31/2012 12/31/2011 Reported LIFO inventory(in 000'$) 219686 241154 Add: IF FIFO would have been followed Inventory would have been higher by (in 000'$) 26900 25100 FIFO inventory (in 000'$) 246586 266254Related Questions
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