Inventory transactions for Jack Franklin Stores are summarized in the table below. The company uses the LIFO perpetual method for both financial and tax reporting.

The inventory footnote from Jack Franklin Stores€™ annual report indicates that the difference between the LIFO costs and the current (FIFO) costs of inventory is equal to $ 0 and $ 12,750 at the beginning and end of the year, respectively.
Required
a. Determine the ending inventory and cost of goods sold for the current year.
b. Use the footnote information provided in the question to convert the beginning and ending inventories from a LIFO to a FIFO basis.
c. Convert the cost of goods sold for the current year from the LIFO to the FIFO basis.
d. Compare the inventory turnover ratio for the current year computed under the two methods of inventory valuation.

Transcribed Image Text:

Transaction Units Sales in Units Unit Cost Total Cost Beginning Inventory: January 1 Oldest cost $5 2,000 1.750 3.750 S 10,000 14,000 S 24,000 Next oldest cost Total beginning inventory Purchases January 20 February 18 5,000 12,500 21,250 45.000 137,500 S206,500 Subtotal Units sold on May 1 at $18 July 29 Total available for sale Total units sold 19,000 18,750 40,000 19,000) 10 187,500 $394.000 Ending inventcry 21,000