Walgreen Co., the largest drug store chain in the United States, reported invent
ID: 2492428 • Letter: W
Question
Walgreen Co., the largest drug store chain in the United States, reported inventories of $7,213 million and $6,852 million in its February 28, 2014, and August 31, 2013, balance sheets, respectively. Cost of goods sold for the six months ended February 28, 2014, was $27,132 million. The company uses primarily the LIFO inventory method. A disclosure note reported that if FIFO had been used instead of LIFO, inventory would have been higher by $2,200 million and $2,100 million at the end of the February 28, 2014, and August 31, 2013, periods, respectively.
-Calculate cost of goods sold for the six months ended February 28, 2014, assuming Walgreen used FIFO instead of LIFO.
Explanation / Answer
FIFO Cost of Goods Sold = LIFO COGS - Increase in LIFO Reserve FIFO Cost of Goods Sold = 27132 - (2200 - 2100) = $27032 Million
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