Question
Use this information for the following three questions. KW Steel Corp. uses the LIFO method of inventory valuation. Waretown Steel, KWs major competitor, instead uses
Use this information for the following three questions.
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 | ||||
| ($ in millions) | 2014 | 2013 |
| 2014 | 2013 |
| Balance sheet inventories | 797.6 | 692.7 | 708.2 | 688.6 | |
| LIFO reserve | 378.0 | 334.9 | |||
| Sales | 4,284.8 | 4,029.7 | 3,584.2 | 3,355.8 | |
| Cost of goods sold | 3,427.8 | 3,226.5 | 2,724.0 | 2,617.5 | |
Use this information for the following three questions.
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 | ||||
| ($ in millions) | 2014 | 2013 |
| 2014 | 2013 |
| Balance sheet inventories | 797.6 | 692.7 | 708.2 | 688.6 | |
| LIFO reserve | 378.0 | 334.9 | |||
| Sales | 4,284.8 | 4,029.7 | 3,584.2 | 3,355.8 | |
| Cost of goods sold | 3,427.8 | 3,226.5 | 2,724.0 | 2,617.5 | |
Calculate inventory turnover for KW Steel in 2014.
Calculate inventory turnover for Waretown Steel in 2014.
Re-calculate KW Steel's inventory turnover in 2014 if they used FIFO.
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Corporate Financial Reporting And Analysis A Global Perspective
Authors: S. David Young, Jacob Cohen, Daniel A. Bens
4th Edition
1119494575, 978-1119494577
