Homework answers / question archive / Assume the following for this company that uses LIFO to value its inventory: Sales = 24,000,000 Beginning inventory = 18,000,000 Cost of sales = 17,500,000 Ending inventory = 23,000,000 Current assets = 7,500,000 Current liabilities = 3,800,000 The footnotes indicate that if the company valued its inventory using FIFO, the beginning inventory would be 650,000 higher and the ending inventory would be 850,000 higher

Assume the following for this company that uses LIFO to value its inventory: Sales = 24,000,000 Beginning inventory = 18,000,000 Cost of sales = 17,500,000 Ending inventory = 23,000,000 Current assets = 7,500,000 Current liabilities = 3,800,000 The footnotes indicate that if the company valued its inventory using FIFO, the beginning inventory would be 650,000 higher and the ending inventory would be 850,000 higher

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1. Assume the following for this company that uses LIFO to value its inventory: Sales = 24,000,000 Beginning inventory = 18,000,000 Cost of sales = 17,500,000 Ending inventory = 23,000,000 Current assets = 7,500,000 Current liabilities = 3,800,000 The footnotes indicate that if the company valued its inventory using FIFO, the beginning inventory would be 650,000 higher and the ending inventory would be 850,000 higher. What would the gross margin and current ratio have been had the company used FIFO accounting?
2. Gorilla, Corp. implemented a defined-benefit pension plan for its employees on January 2, 2012. The following data are provided for year 2012, as of December 31, 2012. Projected benefit obligation = 70,000 Employer's contribution at year end = 60,000 What amount should Gorilla record as additional minimum pension liability at December 31, 2012?
3. Regarding actuarial assumptions, firms must disclose in notes to the financial statements all of the following except:
   A.) the discount rate used to compute the pension benefit obligation.
   B.) the expected rate of return on pension investments.
   C.) estimates of the number of retirees over the future 10 years.
   D.) the rate of compensation increase.
4. A typical defined benefit pension plan formula includes all of the following except:
   A.) the number of years of employee service
   B.) the fair market value of pension plan assets
   C.) a credit for each year of annual service
   D.) the final salary at retirement date
5. Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?
   A.) Record as an asset or liability and recognize changes in fair value in other comprehensive income.
   B.) Do not record as an asset or liability, record income from the transaction at maturity and recognize in earnings.
   C.) Record as an asset or liability, recognize changes in fair value currently in earnings.
   D.) Record as an asset or liability if off-balance sheet risk is material.
6. Which of the following is not one of the GAAP classifications for derivatives?
   A.) Speculative investment
   B.) Fair value hedge
   C.) Asset-Liability hedge
   D.) Cash flow hedge
7. Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below: Falcon Networks Components of 2012 Income Tax Expense (in millions) Current - Federal = $ 55.65 Current Foreign = 83.85 Current State and Local = 14.69 Total Current = $154.19 Deferred - Federal = $ 30.28 Deferred Foreign = 23.89 Total Deferred = $ 54.17 Total Income Tax Expense = $208.36 Note: Falcon Networks has no current liability at year-end with respect to total current taxes. Components of Income before Taxes in 2012 United States = $256.35 Foreign = 236.85 Total = $493.20 Using the information provided by Falcon Networks what is the foreign effective tax rate for 2012
8. A large manufacturer recently changed its cost-flow assumption method for inventories at the beginning of 2012. The manufacturer has been in operation for almost 40 years, and for the last decade, it has reported moderate growth in revenues. The firm changed from the LIFO method to the FIFO method and reported the following information: December 31 2011: (amounts in millions): FIFO Cost Inventories = 388.1 Excess FIFO over LIFO costs = (229) December 31 2012: (amounts in millions): FIFO Cost Inventories = 419.7 Excess FIFO over LIFO costs = (210.4) Cost of goods sold FIFO = 2,050.8 Cost of goods sold LIFO = 2,417.1 What is the inventory turnover ratio for 2012 using the LIFO and FIFO cost-flow assumption methods?
9. A LIFO liquidation during periods when prices are increasing results in a company doing what?
10. Under the percentage-of-completion contract method when are revenue, cost and gross profit recognized?