Question
Analyzing Inventories with Quarterly Data and LIFO Liquidation The inventory footnote from The Dow Chemical Companys first quarter 2019 SEC report follows. The company also
Analyzing Inventories with Quarterly Data and LIFO Liquidation The inventory footnote from The Dow Chemical Companys first quarter 2019 SEC report follows. The company also reports cost of goods sold for Q1 of 2019 of $11,778 million.
Inventories, in millions | Mar. 31, 2019 | Dec. 31, 2018 |
---|---|---|
Finished goods | $5,703 | $5,640 |
Work in process | 2,239 | 2,214 |
Raw materials | 940 | 941 |
Supplies | 891 | 880 |
Total | $9,773 | $9,675 |
Adjustment of inventories to a LIFO basis | (292) | (415) |
Total inventories | $9,508 | $9,260 |
Required
What is the effect on Q1 of 2019 pretax income and cash flow of using this inventory costing method, assuming a 21% tax rate? Note: Do not use any negative signs with your answers.
Effect on pretax income (in millions): $Answer
Effect on cash flows (in millions): $Answer
Determine the FIFO values for inventories and cost of goods sold for Q1 of 2019. Recompute inventory turnover and DIO. FIFO inventories $Answer
FIFO CGS $Answer
Note: Do not round until your final answer; round your final answer to one decimal place (for example, enter 6.8 for 6.77555).
Inventory turnover Answer
Average inventory days Answer
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started