Supplemental LIFO disclosures; LIFO reserve;
MARYSTEEL INC. is the global leader in providing furniture for office environment. The company uses the LIFO inventory method for external reporting and for income tax purposes but maintain its internal records using FIFO. The following disclosure note was included in a recent annual report:
5. Inventories ($ in millions):
February 27,2009 February 29,2008
Raw material $61.3 $67.5
Work -in-process $15.9 $20.9
Finished goods $79.9 $87.9
157.1 176.3
LIFO reserve (27.2) (29.6)
$ 129.9 $146.7
The company's income statement reported cost of goods sold of $2,236.7 million for the fiscal year ended February 27, 2009.
Required:
1. MARYSTEEL INC adjusts the LIFO reserve at the end of its fiscal year. Prepare the February 27, 2009, adjusting entry to make the cost of goods sold adjustment.
2. If MARYSTEEL INC had used FIFO to value its inventories, what would cost of goods sold have been for the 2009 fiscal year?