PROBLEM 8.8A FIFO versus LIFO Comparisons LO8-12 , LO8-72 Walmart uses LIFO to account for its inventories. Recent financial statements were used to compile the following information (dollar figures are in millions) Average inventory (throughout the year) Current assets (at year-end) Current liabilities (at year-end) Sales Cost of goods solod Gross profit $ 45,000 63,278 65,272 482,229 365,086 117,143 Instructions a. Using the information provided, compute the following measures based upon the LIFO method 1. Inventory turnover 2. Current ratio (see Chapter 5 for a discussion of this ratio) 3. Gross profit rate (see Chapter 6 for a discussion of this statistic) b. Assuming cost of goods sold would be lower under FIFO, what circumstances must the company have encountered to cause this situation? (Were replacement costs, on average, rising or falling?) c. How would you expect these ratios to differ (i.e.. what direction) had the company used FIFO instead of LIFO