Problem 8.8A

# Problem 8.8A - This is why when the LIFO method is applied...

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PROBLEM 8.8A PART A 1. 150.255÷20.618= 2. 26.555÷28.949= Current Assets ÷ Currentt Liablities 3. 41.047÷191.239 PART B 1 150.053÷20.908 2. 26.555÷28.949= Current Assets ÷ Currentt Liablities 3. 41.047÷191.239

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Inventory Turnover Rate 7.29 Times Ratio 1: .917 Gross Profit 21.5% Inventory Turnover Rate 7.18 Times Ratio 1: .917 Gross Profit 21.5%
C. Under FIFO the cost of goods sold were lower than that of the LIFO, which means that when Wal Mart puchased some their goods at an earlier time they were a lot cheaper than what the current market is holding how.
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Unformatted text preview: This is why when the LIFO method is applied the cost of goods is higher On average the replacement costs were rising. D The reason why the average days to collect accounts receivable is so low is because the days averaged to collect are so low. In order to put this into a formula you must go back to chapter 7 and solve in reverse. Since the days are already calculated at 3, that means you must mulitply by 365. That gives you an answer of 1095. Net sales are 191.329 so divided by 1095 gives you an answer of .17....
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Problem 8.8A - This is why when the LIFO method is applied...

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