Fuji Photo Film Company isa Japanese manufacturer of photographic products. Its U.S. counterpart, and arch rival, is Eastman Kodak. Together the two dominate the global market for film. The following information was extracted from the financial statements of the two companies.

Instructions Answer each of the following questions.

(a) Why do you suppose that Fuji makes adjustments to its accounts so that they conform with U.S. accounting principles when it reports its results?

(b) What are the 1998 inventory turnover ratios and average days in inventory of the two companies (ignoring the LIFO reserve)?

(c) What are the 1998 inventory turnover ratios and average days in inventory of the two companies, adjusting for the LIFO reserve, if given? Do you encounter any problems when making this comparison? .

(d) Calculate as a percentage of total inventory the portion that each of the components of 1998 inventory (raw materials, work in process, and finished goods) represents.
Comment on your findings. (Use FIFO for Kodak.)
FINANCIAL ANALYSIS ON THE WEB

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FUJI PHOTO FILM Notes to the Financial Statements Summary of significant accounting policies The Company and its domestic subsidiaries maintain their records and prepare their financial statements in accordance with accounting practices generally ac- cepted in Japan.... Certain reclassifications and adjustments, including those re- lating to tax effects of temporary differences and the accrual of certain expenses, have been incorporated in the accompanying consolidated financial statements to conform with accounting principles generally accepted in the United States. Inventories Inventories are valued at the lower of cost or market, cost being determined gen- erally by the moving-average method, except that the cost of the principal raw materials is determined by the last-in, first-out method. Note 6. Inventories Inventories at March 31, 1998 and 1997, consisted of the following: (thousands of U.S. dollars) 1998 (millions of yen) 1998 Finished goods 135,795 1997 123,010 $1,028,750 Work in process Raw materials and supplies 51,001 55,525 48,867 46,959 386,371 420,644 242,321 218,836 $1,835,765