Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 9

JC Penney Company uses LIFO in applying the lower-of-cost-or-market.ecent financial statements were used to compile the following information (dollar figures in millions):

Instructions
a.sing the information provided, compute the following measures based on the LIFO method:
1.nventory turnover.
2.urrent ratio (see Chapter 5 for a discussion of this ratio).
3.ross profit rate (see Chapter 6 for a discussion of this statistic).
b.ssuming the 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.ow would you expect these ratios to differ (i.e., what direction) had the company used FIFO instead of LIFO
d.xplain why the average number of days required by JC Penney to collect its accounts receivable is so low.See Chapter 7 for a discussion of the accounts receivable turnover.)