EXERCISE 4–1 Refer to the financial statements of Campbell Soup Company in Appendix A.

Required:

a. Compute Year 10 cost of goods sold and gross profit under the FIFO method. (Note: At the end of Year 9, LIFO inventory is $816.0 million, and the excess of FIFO inventory over LIFO inventory is $88 million.)

b. Explain the potential usefulness of the LIFO to FIFO restatement in a.

c. Compute ending inventory under the FIFO method for both Years 10 and 11.

d. Explain why the FIFO inventory computation in c might be useful for analysis.