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KW Steel Corp. uses the LIFO method of inventory valuation. Waretown Steel, KWs major competitor, instead uses the FIFO method. The following are excerpts from
KW Steel Corp. uses the LIFO method of inventory valuation. Waretown Steel, KWs major competitor, instead uses the FIFO method. The following are excerpts from each companys 2014 and 2013 financial statements:
KW Steel Corp. | Waretown Steel | ||||
| 2014 | 2013 |
| 2014 | 2013 |
Balance sheet inventories | 800 | 700 | 720 | 700 | |
LIFO reserve | 400 | 350 | |||
Sales | 4,300 | 4,000 | 3,500 | 3,350 | |
Cost of goods sold | 3,400 | 3,200 | 2,700 | 2,600 |
Calculate 2014 inventory turnover for both companies. Then re-calculate KW Steels 2014 inventory turnover if they converted to FIFO.
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