The following data are excerpted from
Belpre Co.'s 2019 financial statements (in millions):
Vienna's inventory footnote follows:
Inventories
Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At August 31, 2019 and 2018, inventories would have been greater by $3,717 million and $3,201 million, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. Inventory includes product cost, inbound freight, warehousing costs and vendor allowances that are not included as a reduction of advertising expense.
a. Compute the inventory turnover ratios for 2019 and 2018 (ending inventory in 2017 is $20,373 million). What does this say about the company?
b. Is it correct to include in-bound freight in Belpre's inventory cost? Why or why not?

Question

The following data are excerpted from 
Belpre Co.'s 2019 financial statements (in millions):
  Vienna's inventory footnote follows:
Inventories
Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At August 31, 2019 and 2018, inventories would have been greater by $3,717 million and $3,201 million, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. Inventory includes product cost, inbound freight, warehousing costs and vendor allowances that are not included as a reduction of advertising expense.
a. Compute the inventory turnover ratios for 2019 and 2018 (ending inventory in 2017 is $20,373 million). What does this say about the company?
b. Is it correct to include in-bound freight in Belpre's inventory cost? Why or why not?

Quizplus · Accepted Answer

The Answer of The following data are excerpted from 
Belpre Co.'s 2019 financial statements (in millions):
  Vienna's inventory footnote follows:
Inventories
Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At August 31, 2019 and 2018, inventories would have been greater by $3,717 million and $3,201 million, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. Inventory includes product cost, inbound freight, warehousing costs and vendor allowances that are not included as a reduction of advertising expense.
a. Compute the inventory turnover ratios for 2019 and 2018 (ending inventory in 2017 is $20,373 million). What does this say about the company?
b. Is it correct to include in-bound freight in Belpre's inventory cost? Why or why not?

The Following Data Are Excerpted from