1. What is the balance of Inventory on December 31, 2011? What were Cost of Goods Sold for 2011?

2. Which method does Trex use to value inventory on their balance sheet? What are the advantages and disadvantages of using this method?

3. What would inventory and total assets have been if Trex used FIFO costs?

4. What would Costs of Goods Sold have been if Trex used FIFO costs?

5. Calculate Pretax Income for Trex using FIFO costs.

6. Do you think Trex should use FIFO or LIFO to value inventories going forward? Why?

7. In 2009, Trex had a liquidation of inventories. What does this mean? Did Trex recognize a loss or a benefit from this and for what amount was the loss/benefit?

You are presented with the Financial Statements for Trex Company, Inc. to answer the following questions.