In the Following Information from the Year 2 Balance Sheet

question 117

Essay

In the following information from the Year 2 balance sheet of Kayla Enterprises,all amounts have been rounded to millions of dollars.
$\begin{array}{lrr}& \underline{\text { May 31, Year } 2} & \underline{\text { May 31, Year } 1}\\\text { Raw materials } & \$ 25.8 & \$ 52.1 \\\text { Work-in-process } & 44.8 & 34.7 \\\text { Finished goods } & 1,132.70 & 1,303.8 \\\text { Inventories at FIFO } & 1,203.30 & 1,390.6 \\\text { Adiustment to LIFO } & 5.6 & 21.9\end{array}$
Answer the following questions:
A) Describe what costs are included in each of the three types of inventones listed for Kayla Enterprises.

B) Even though a footnOte describing the inventory costing method(s) used by the company is not provided here, what can you conclude about the inventory costing methods(s) used by the company?

C) Explain what the amount "Adjustment to LIFO" represents. What effect does this adjustment have on the company's net earnings in Year 1 and Year 2?

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Definitions:

Markets

Economic systems where goods and services are exchanged between buyers and sellers under the influence of supply and demand.

Neoliberalism

An economic and political ideology that emphasizes free-market capitalism, deregulation, and a reduction in government spending.

Cultural Imperialism

The dominance of one culture over another, often through media and global trade, leading to cultural homogenization and loss of indigenous cultures.

Socialism

A political and economic theory of social organization that advocates for the means of production, distribution, and exchange should be owned or regulated by the community as a whole.