Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. Suppose it reported the following information in its 2017 annual report.

(in millions) 2017 2016 Inventories (LIFO) $ 2,397 $3,042 Current assets 30,857 Current liabilities 12,753 LIFO reserve 1,367 Cost of goods sold 16,255 Instructions

(a) Compute Deere’s inventory turnover and days in inventory for 2017. (Round inventory turnover to 2 decimal places.)

(b) Compute Deere’s current ratio using the 2017 data as presented, and then again after adjusting for the LIFO reserve.

(c) Comment on how ignoring the LIFO reserve might affect your evaluation of Deere’s liquidity.
*E 6-14 Inventory data for Jeters Company are presented in E6-7.
Instructions

(a) Calculate the cost of the ending inventory and the cost of goods sold for each cost fl ow assumption, using a perpetual inventory system. Assume a sale of 410 units occurred on June 15 for a selling price of $8 and a sale of 50 units on June 27 for $9. (Note: For the moving-average method, round unit cost to three decimal places.)

(b) How do the results differ from E6-7?

(c) Why is the average unit cost not $6 [($5 + $6 + $7) ÷ 3 = $6]?
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