Business Activity 7

Use the attached information for Whirlpool Corporation to answer the following questions:

1. What inventory method does Whirlpool use to value its inventory in the

U.S. _________________________

Latin American and Asia and EMEA _____________________

All other inventory _______________________

(3 points)

2. Why is Whirlpool only using LIFO for the U.S. inventories? (3 points) You may want to refer to the International Financial Reporting Standards box in Chapter 8. Use complete sentences.

3. Compute the amount of Cost of goods sold if Whirlpool had used FIFO instead of LIFO for its U.S. Inventories for the year ended December 31, 2015. (4 points) Show your computations here:

You may want to look at the Financial Reporting Case on Rite Aid from Chapter 8. Whirlpool uses Cost of products sold rather Cost of goods sold.

WHIRLPOOL CORPORATION CONSOLIDATED BALANCE SHEETS At December 31, (MIlona of dollars) 2017 2016 Asseta Current assets Cash and cash equivalents 1,196 1,085 2,665 2,988 Accounts receivable, net of allowance of $157 and $185, respectively 2,711 Inventories 2,623 Prepaid and other current assets 1,081 920 7,930 Tatal current assets 7,339 WHIRLPOOL CORPORATION CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, (MIllons of dollars, except per ahare data) 2017 2016 2015 Net sales 21,253 20,718 20,891 Expenses Cost of products sold Grass margin 17,651 17,028 17,231 3,602 3,692 3,660 Inventories United States production iventories are stated at last-in, first-out (LIFO") cast. Latin America, Asia and certain EMEA inventories are stated at average cost. The remaining inventories are stated at first in, first-out FIFO) cost. Costs do not exceed net realizable values. Changes in the amount that FIFO cast exceed LIFO cast are recognized in cost of goods sold. See Note 2 to the Consolidated Financial Statements far additional information about inventories Inventories (2) The following table summarizes cur inventories at December 31, 2017 and 2018 Millone of dollars 2017 2016 $ 2,374 2,070 Finished products Raw materials and work in process 725 651 3,099 2,721 Less: excess of FIFO cost over LIFO cost (111) $ 2.988 (98) Tatal inventories 2,823 LIFO inventories represented 38% and 37 % of total inventories at December 31, 2017 and 2016, respectively WHIRLPOOL CORPORATION CONSOLIDATED BALANCE SHEETS At December 31, (MIlona of dollars) 2017 2016 Asseta Current assets Cash and cash equivalents 1,196 1,085 2,665 2,988 Accounts receivable, net of allowance of $157 and $185, respectively 2,711 Inventories 2,623 Prepaid and other current assets 1,081 920 7,930 Tatal current assets 7,339 WHIRLPOOL CORPORATION CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, (MIllons of dollars, except per ahare data) 2017 2016 2015 Net sales 21,253 20,718 20,891 Expenses Cost of products sold Grass margin 17,651 17,028 17,231 3,602 3,692 3,660 Inventories United States production iventories are stated at last-in, first-out (LIFO") cast. Latin America, Asia and certain EMEA inventories are stated at average cost. The remaining inventories are stated at first in, first-out FIFO) cost. Costs do not exceed net realizable values. Changes in the amount that FIFO cast exceed LIFO cast are recognized in cost of goods sold. See Note 2 to the Consolidated Financial Statements far additional information about inventories Inventories (2) The following table summarizes cur inventories at December 31, 2017 and 2018 Millone of dollars 2017 2016 $ 2,374 2,070 Finished products Raw materials and work in process 725 651 3,099 2,721 Less: excess of FIFO cost over LIFO cost (111) $ 2.988 (98) Tatal inventories 2,823 LIFO inventories represented 38% and 37 % of total inventories at December 31, 2017 and 2016, respectively