Jeans F' All and Jeans 'R' Us are very similar companies in size and operation. Jeans F'
Question:
Jeans F' All and Jeans 'R' Us are very similar companies in size and operation. Jeans F' All uses FIFO and straight-line depreciation methods, and Jeans ' \(R\) ' Us uses LIFO and accelerated depreciation. Prices have been rising during the past several years. Both Jeans F' All and Jeans ' \(R\) ' Us have paid their taxes in full for the current year, and both companies use the same method for figuring income taxes as for financial reporting. Identify which company will report the greater amount for each of the following ratios:
1. Current ratio 2. Inventory turnover 3. Profit margin 4. Return on assets If you cannot state which company will report the greater amount, explain why.
Step by Step Answer:
Financial Accounting A Global Approach
ISBN: 9780395839867
1st Edition
Authors: Sidney J. Gray, Belverd E. Needles