Solution-Note 1 if the first-in first-out fifo method of

Note 1 if the first-in first-out fifo method of accounting

Reference no: EM13573801

Excerpts from the annual report of Lands" End follow ($ in thousands):

	Year 9	Year 8
Inventory	$219,686	$241,154
Cost of sales	754,661	675,138
Net income	31,185	64,150
Tax rate	37%	37%

Note 1: If the first-in, first-out (FIFO) method of accounting for inventory had been used, inventory would have been approximately $26.9 million and $25.1 million higher than reported at Year 9 and Year 8, respectively.

Required:

a. What would ending inventory have been at Year 9 and Year 8 had FIFO been used?

b. What would net income for the year ended Year 9 have been had FIFO been used?

c. Discuss the usefulness of LIFO to FIFO restatements for analysis purposes.

Reference no: EM13573801

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Note 1 if the first-in first-out fifo method of accounting

Reference no: EM13573801

Reference no: EM13573801

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