Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. need urgent i will rate for sure q-2: let's assu

need urgent i will rate for sure Q-2: Let's assume you are analyzing...

90.2K

Verified Solution

Question

Accounting

image

need urgent i will rate for sure

Q-2: Let's assume you are analyzing two companies' financial statements in the same industry e.g.: ALX and PBC. Both businesses are organized as corporations and therefore must pay income taxes on their profits. Both companies manage large amount of inventories. A note to ALX financial statement shows that the company's inventory is shown at a cost that is far below current market value of the inventory while PBC inventory cost which is very close to its current market value. Answer the following questions and explain reasoning behind your answers. If we assume that both companies are identical except for the method used in valuation of inventory: (a) What method of inventory valuation is probably used by both companies? (b) Which company probably reporting the higher net income in recent years? (c) Which company's financial statement probably imply the highest inventory turnover rate? (d) Which company's financial statement probably imply the highest current ratio? (e) If both companies sold their entire inventory at the same sales prices, which company would you expect to report the larger amount of gross profit

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students