Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The inventories disclosure note in the 2014 financial statements for SUPERVALU Inc., one of the largest grocery chains in the United States, included the following:

The inventories disclosure note in the 2014 financial statements for SUPERVALU Inc., one of the largest grocery chains in the United States, included the following: During fiscal 2014, 2013 and 2012, inventory quantities in certain LIFO layers were reduced. These reductions resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of fiscal 2014, 2013 and 2012 purchases. As a result, Cost of sales decreased by $28, $20 and $23 in fiscal 2014, 2013 and 2012, respectively. All inventories are stated at the lower of cost or current market values. Cost for inventories at the majority of our operations is determined on a last-in, first-out (LIFO) basis."

Required: The disclosure note indicates an inventory liquidation during 2014, 2013, and 2012. By how much did net income in 2014 increase due to the liquidation? Assume an income tax of 30%. (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting For Decision Makers

Authors: Peter Atrill

9th Edition

9781292204574

More Books

Students also viewed these Accounting questions

Question

In Problems 1968, solve each equation, if possible. 2 + 4 y = 3

Answered: 1 week ago

Question

The following structure shows a XML document. John 3 0

Answered: 1 week ago