Problem
Suppose this information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation for a recent year. General Motors Corporation uses the LIFO inventory method.
|
Beginning inventory
|
$15,279
|
|
Ending inventory
|
14,409
|
|
LIFO reserve
|
1,505
|
|
Current assets
|
64,524
|
|
Current liabilities
|
68,379
|
|
Cost of goods sold
|
154,105
|
|
Sales revenue
|
163,412
|
a) Calculate the inventory turnover and days in inventory.
b) Calculate the current ratio based on inventory as reported using LIFO.
c) Calculate the current ratio after adjusting for the LIFO reserve.