Analyzing Inventory Disclosure Comparing LIFO & FIFO The current asset section of the 2014 and…

Analyzing Inventory Disclosure Comparing LIFO & FIFO The current asset section of the 2014 and 103 fiscal year end balance sheet of The Kroger Co are presented in the accompany tables: a. At what dollar amount does Kroger report its inventory in its Jan. 31, 205 balance sheet? b. What is the cumulative effect (through Jan. 31, 2015) of the use of LIFO on Kroger’s pretax earning? c. Assuming a 35% tax rate, what is the cumulative (through Jan. 31, 2015) tax effect of the use of LIFO to determine inventory costs? d. Kroger reported net earnings of $1,728 million in its fiscal year 2014 income statement. Assuming a 35% tax rate, what amount of net earnings would Kroger report if the company is using FIFO inventory costing methods? e. Kroger reported merchandise cost of $85,512 M in fiscal year 2014. Compute the inventory turnover for the year. f. How would the inventory turnover ratio differ if the FIFO costing method had been used? Current asset (in millions)                    Jan. 31,2015                   Feb. 1, 2014 Cash & temporary cash investment            268                         401 Deposits in transit                                       988                         958 Receivables                                                1,266                       1,116 FIFO Inventory                                            6,933                          6,801 LIFO credit                                                   (1,245)                     (1,150) Prepaid & other current assets                   701                               704 Total current Assets                                     8,911                          8830    

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