Question

1. Use the following information for Marigold Corp., Nash's Trading Post, LLC, Blue Spruce Industries, and Evans Services to answer the question “Using LIFO, what is Marigold's inventory turnover for 2022 (to the closest decimal place)?”

(amounts in $ millions)	Marigold	Nash's Trading Post	Blue Spruce	Evans
Inventory Method for 2021 & 2022	LIFO	FIFO	LIFO	FIFO
2021 Ending inventory assuming LIFO	$322	0	$243	0
2021 Ending inventory assuming FIFO	$441	$525	$318	$663
2022 Ending inventory assuming LIFO	$422	0	$179	0
2022 Ending inventory assuming FIFO	$604	$598	$199	$520
2021 Current assets (reported on balance sheet)	$1697	$2009	$1300	$2770
2021 Current liabilities	$1003	$1221	$569	$1180
2022 Current assets (reported on balance sheet)	$2209	$2623	$1100	$2406
2022 Current liabilities	$1290	$1398	$453	$982
2022 Cost of goods sold	$4700	$5028	$3026	$6990

6.7 times

7.8 times

9.0 times

12.6 times

2.

Use the following information for Skysong, Inc., Kingbird, Inc., Bridgeport Industries, and Evans Services to answer the question “Using the LIFO adjustment, which company shows the greatest improvement in its current ratio from 2021 to 2022?”

(amounts in $ millions)	Skysong	Kingbird	Bridgeport	Evans
Inventory Method for 2022 & 2021	LIFO	FIFO	LIFO	FIFO
2021 Ending inventory assuming LIFO	$328	0	$228	0
2021 Ending inventory assuming FIFO	$427	$533	$305	$663
2022 Ending inventory assuming LIFO	$433	0	$162	0
2022 Ending inventory assuming FIFO	$580	$612	$197	$537
2021 Current assets (reported on balance sheet)	$1667	$2027	$1315	$2759
2021 Current liabilities	$981	$1210	$545	$1201
2022 Current assets (reported on balance sheet)	$2219	$2606	$1103	$2389
2022 Crrent liabilities	$1307	$1411	$458	$992
2022 Cost of goods sold	$4691	$5049	$2995	$7010

Bridgeport

Evans

Skysong

Kingbird

3.

Manufactured inventory that has begun the production process but is not yet completed is

finished goods.

raw materials.

merchandise inventory.

work in process.

4. Each of the following is a feature of internal control except

independent internal verifications.

limited access to assets.

generic design of documents.

authorization of transactions.

5.

When is a physical inventory usually taken?

When the company has its greatest amount of inventory.

When goods are not being sold or received.

At the end of the company’s fiscal year.

When the company has its greatest amount of inventory and at the end of the company's fiscal year.

Answer 1

1)Correct option is "D"

Average inventory (under LIFO) =[beginning inventory +ending inventory]/2

             = [322+422]/2

             = 744/2

             = 372

Inventory turnover ratio for Marigold =Cost of goods sold /Average inventory

              = 4700/ 372

               = 12.6

2)

	Formula	Bridgeport	Evans	Skysong	Kingbird
2021	current asset/current liabilities	1667/981=1.70	2027/1210=1.68	1315/545=2.41	2759/1201=2.30
2022	current asset/current liabilities	2219/1307=1.70	2606/1411=1.85	1103/458=2.41	2389/992=2.41

Evan has shown a greatest improvement in terms of current ratio.

3)correct option is "d" -work in process inventory

Inventory that is started and not yet completed.

4)correct option is "c" - generic design of documents.

Internal control is an independent examination of company's fixed asset,ensuring the reliability and integrity of financial information for the efficient and effective operations of an organization.

so all of the options provided is a part of internal control except generic design of documents.