Ask Experts Questions for FREE Help !
Ask
    sfinx's Avatar
    sfinx Posts: 1, Reputation: 1
    New Member
     
    #1

    Jan 22, 2011, 09:08 PM
    Fifo vs. lifo
    Dolgo Bontai, the COO of Rhekep Ltd, has recently reviewed the operations
    Of the company, and concerned about the continued weak profit
    Performance of the company. The company board has constantly stressed
    The need for the company to improve its profits. Otherwise, the company will
    Not be able to sustain the confidence of its shareholders and creditors. It is
    Now a couple weeks before the end of the year, and hence it is almost certain
    That the company will record another low profit at the end of the year. Dolgo
    Knows that as a consequence of this low profit performance the company
    Will have difficulty in refinancing some loans and will be pushed to pay
    Higher interest rates. This will increase the financial burden of the company.
    Dolgo realises that it is way too late for operations to increase profits for the
    Year. However, he has come up with a plan, which in his opinion, will enable
    The company to increase the reported profit for that year. He mentions the
    Fact that the prices of inventory have been failing in recent weeks, and thus
    He suggests for the company to purchase large amounts of inventory in the
    Remaining two weeks of the year, and uses the LIFO methods for valuing and
    Reporting inventories for that year.
    As the junior but talented junior accountant, you are asked by the CEO,
    Siganu Gayawela, about Dolgo's suggestion. Siganu particularly wants to
    Know:
    (a) whether Dolgo's plan will enable the company to report higher profit
    For the year;
    (b) the positive and negative consequences of the proposed plan for the
    Company and shareholders; and
    (c) whether the plan complies with accounting standards.
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
    Ultra Member
     
    #2

    Jan 22, 2011, 09:15 PM

    Please read the following announcement.

    https://www.askmehelpdesk.com/financ...-b-u-font.html

    I'm sorry but we won't do your homework for you. If you'd like to post your response to this problem we can review it and help you.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Using lifo and fifo [ 1 Answers ]

Engle Enterprises reports net sales revenue for 2009 to be $595,000, January 1, 2009 inventory at $102,000, net purchases at $370,000, and operating expenses at $155,000. Engle Enterprises currently values inventory using LIFO. Using the LIFO method, December 31, 2009, inventory is valued at...

Lifo and Fifo [ 1 Answers ]

How would I set this up on LIFO and FIFO Beginning inventory 10units@$20 Sale 6 units Purchase 15units@$22 Sale 14units

Fifo and Lifo! [ 1 Answers ]

date units purchased total cost of purchased Jan 1 125 units 1,000 Jan 8 150 units 1,150 Jan 18 225 units 825 Jan 30 200 units 750 Using lifo inventory method , the value of the ending inventory on jan 31 is:

Fifo and lifo [ 3 Answers ]

Can a company use fifo to account for inventory and then use lifo for reporting financial and tax info and is this what is known as the lifo conformity rule?


View more questions Search