Interpreting inventory disclosures. DuPont is a diversified chemicals company. Its annual report discloses inventories under LIFO of $4,409 million at the beginning of the year and

$4,107 million at the end of the year and cost of goods sold of $19,476 million for the year. If the firm had used a FIFO cost flow assumption, its beginning inventory would have been $4.8^3 million and its ending inventory would have been $4,407 million. Sales for the year totaled $26,996 million.

a. Compute the amount for cost of goods sold for the year assuming DuPont had used a FIFO instead of a LIFO cost How assumption.

b. Did the quantities of items in inventory increase or decrease during the year? Explain.

c. Did the manufacturing cost of items in inventory increase or decrease during the year?
Explain.

d. Compute the inventory turnover ratio for DuPont under both LIFO and FIFO for the year.

e. Why does the inventory turnover ratio under LIFO exceed that under FIFO?

f. "The choice of inventory cost flow assumption affects the inventory turnover ratio but should not normally affect the accounts payable turnover ratio." Explain.