Math Problem Statement
The disclosure note below is from the 2020 10-K report of Casey's General Stores, Inc., an operator of convenience stores ($ thousands).
Inventories Inventories, which consist of merchandise and fuel, are stated at the lower of cost or market. For fuel, cost is determined through the use of the first-in, first-out (FIFO) method. For merchandise inventories, cost is determined through the use of the last-in, first-out (LIFO) method. The excess of replacement cost over the stated LIFO value was $87,546 and $80,814 at April 30, 2020 and 2019, respectively. There were no material LIFO liquidations during the period presented. Below is a summary of the inventory values at April 30, 2020 and 2019.
Years Ended April 30, ($ thousands) 2020 2019 Fuel $33,695 $83,204 Merchandise 202,312 189,836 Total Inventory $236,007 $273,040
In 2020, Casey's General Stores reported sales revenue of $9,175.3 million and cost of goods sold of $7,030.6 million.
a. Calculate the amount of inventories purchased by Casey's General Stores in 2020. Round intermediate calculations and answers to one decimal place. $Answer million.
b. What amount of gross profit would Casey's General Stores have reported if the FIFO method had been used to value all inventories in 2020. Round intermediate calculations and answer to one decimal place. $Answer million
c. Calculate the gross profit margin (GPM) as reported and assuming that the FIFO method had been used to value all inventories. Round answers to two decimal places (i.e., 0.15785 = 15.79%) As reported Answer Under FIFO Answer
Solution
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Math Problem Analysis
Mathematical Concepts
Inventory Accounting
Gross Profit Calculation
Cost of Goods Sold
LIFO vs FIFO Accounting
Formulas
COGS = Beginning Inventory + Purchases - Ending Inventory
Purchases = COGS + Ending Inventory - Beginning Inventory
Gross Profit = Sales Revenue - COGS
Gross Profit Margin = (Gross Profit / Sales Revenue)
Theorems
Inventory Accounting under LIFO and FIFO
Impact of LIFO reserve on gross profit
Suitable Grade Level
College level - Accounting or Business Studies
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