The financial statements of P&G are presented in Appendix 5B. The company’s complete annual report, including the notes to the financial statements, can be accessed at the book’s companion website, www.wiley.com/college/kieso.

Instructions
Refer to P&G’s financial statements and the accompanying notes to answer the following questions.
  (a) How does P&G value its inventories? Which inventory costing method does P&G use as a basis for reporting its inventories?
  (b) How does P&G report its inventories in the balance sheet? In the notes to its financial statements, what three descriptions are used to classify its inventories?
  (c) What costs does P&G include in Inventory and Cost of Products Sold?
  (d) What was P&G’s inventory turnover in 2011? What is its gross profit percentage? Evaluate P&G’s inventory turnover and its gross profit percentage.