exercise 8-18 supplemental lifo disclosures; lifo reserve; steelcase [lo8-6]
TRANSCRIPT
![Page 1: Exercise 8-18 Supplemental LIFO disclosures; LIFO reserve; Steelcase [LO8-6]](https://reader036.vdocuments.us/reader036/viewer/2022073113/587d69781a28ab32318b64ed/html5/thumbnails/1.jpg)
Buy here: http://homework.plus/exercise-8-18-supplemental-lifo-disclosures-lifo-reserve-steelcase-lo8-6/ Exercise 8-18 Supplemental LIFO disclosures; LIFO reserve; Steelcase [LO8-6]
Steelcase Inc. is the global leader in providing furniture for office environments. The company
uses the LIFO inventory method for external reporting and for income tax purposes but maintains
its internal records using FIFO. The following disclosure note was included in a recent annual
report:
7. Inventories ($ in
millions):
25-Feb-11 26-Feb-1
0
Raw materials 64 50.3
![Page 2: Exercise 8-18 Supplemental LIFO disclosures; LIFO reserve; Steelcase [LO8-6]](https://reader036.vdocuments.us/reader036/viewer/2022073113/587d69781a28ab32318b64ed/html5/thumbnails/2.jpg)
Work-in-process 14.8 12.8
Finished goods 83.6 66.5
162.4 129.6
LIFO reserve -21.8 -23.
1
140.6 106.5
The company's income statement reported cost of goods sold of $1,743.3 million for the fiscal
year ended February 25, 2011.
Required:
![Page 3: Exercise 8-18 Supplemental LIFO disclosures; LIFO reserve; Steelcase [LO8-6]](https://reader036.vdocuments.us/reader036/viewer/2022073113/587d69781a28ab32318b64ed/html5/thumbnails/3.jpg)
1.
Steelcase adjusts the LIFO reserve at the end of its fiscal year. Prepare the February 25, 2011,
adjusting entry to make the cost of goods sold adjustment. (Enter your answers in millions, (i.e.,
5,500,000 should be entered as 5.5). Round your answers to 1 decimal place. If no entry is
required for a transaction, select "No journal entry required" in the first account field.)
2.
If Steelcase had used FIFO to value its inventories, what would cost of goods sold have been for
the 2011 fiscal year? (Enter your answer in millions rounded to 1 decimal place.)
3.
Since its inception, what is the amount of income tax the company has saved by using LIFO
instead of FIFO for tax purposes? Assume an effective income tax rate of 40%. (Enter your
answer in millions rounded to 3 decimal places.)