QUESTION 4- Real World Financial Statements (18 pts plus 5 bonus points The cons

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QUESTION 4- Real World Financial Statements (18 pts plus 5 bonus points The consolidated balance sheets and statements of income for Whole Foods Market, Inc. for the fiscal years ended 2010 and 2009 are included in the folowing two pages. In addition, the notes to the company's financial statements included the following item We value oar inventories at the lower of cost or market. Cost was determined using the out CLFO) method for cost assigned to items sold is based on the cost of the most recent isems its inventories in fiscal years 2010 and 2009. Under the LIFO method, the d purchased. As a result, u costs of the first items purchased remain in inventory and are used to value ending inventory. The excess of estimated current costs over LIFO carrying value, or I $19.4 million and $27.1 million at September 26, 2010 and September 27, 2009 a) What would ending inventories have been the end of 2010and 2097 (6ts) under the first-in, first-out cost flow assumption at 3a3487 14c0000 ! 972348 IFo regerve 7410602 What would cost of goods sold have been in 2010 under the first-in, first-out cost flow assumption? (8 pts) b) In rentom FIFO 7410602 310602 883 7 32348) 1 D000D 12348 10

Explanation / Answer

e. As can be sen from the statement below, the retained earnings balance is less than the balanceit should have been (when the net income is added to the beginning retined earnings), we can say that there is a payment of dividend during the year.

Beginning balance of Retained earnings for 2010 =$358,215

Add; Net income for the year 2010 =$245,833

=$604,048

Ending balance of Retained earnings =$598,570

Amount of dividend paid =$5,478

f. As can be seen from the above statement $5,478 of dividend was paid to the owners.

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