a. Toyoza's inventories were costed using the LIFO method and that Lincoln Enterprises employed the FIFO method. Provide the adjusting journal entries to restate Toyoza's inventories to a FIFO basis, assuming that ending inventories would have been Y160 million higher under the FIFO method and,

b. Toyoza's purchased goodwill is amortized over 20 years. The current period's amortization expense is Y12 million for the year and is included under other operating expenses. Under a U.S. GAAP impairments test, it would have been 20% of that amount.

Required:

1. Re-do the ratio analysis based on the adjusted data and explain your calculating result.

2. Suppose you are an analyst for Toyoza Enterprises, based on the information in Appendix 9-1 and the above ratio analysis (you may assume some other reasonable SWOT conditions), you are required to do a WOTS-UP anaylsis for Toyoza Enterprises.

EXHIBIT 9-14 Year-End Unadjusted Financial Statements and Related Notes Toyoza Enterprises (\Thousands) Income Statements Sales Operating expenses: Cost of sales Selling and administrative Other operating Goodwill amortization Operating income Gains (losses) Interest expenses Income before taxes Income taxes Income after taxes Equity in earnings of unconsolidated subsidiaries Net income Balance Sheets Cash Accounts receivable, net Marketable securities Inventory Investments Plant and equipment, net 1,400,000 1,120,000 100,000 114,200 65,800 28,000 37,800 23,800 14,000 14,000 124,500 510,000 45,000 390,000 150,000 280,600 Lincoln Enterprises ($Thousands) $12,000 10,044 575 319 10 $ 1,052 130 922 258 664 116 $ 780 $ 1,920 1,660 500 1,680 1,000 5,160