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In the Following Information from the 2013 Balance Sheet of Kayla

question 31

Essay

In the following information from the 2013 balance sheet of Kayla Enterprises,all amounts have been rounded to millions of dollars.
$\begin{array}{lll}& \underline { \text { May 31,2013 } }& \underline { \text { May 31,2012 }} \\\text { Raw materials } & \$ 25.8 & \$ 52.1 \\\text { Work-in-process } & 44.8 & 34.7 \\\text { Finished goods } & 1,132.70 & 1,303.8 \\\text { Inventories at FIFO } & 1,203.30 & 1,390.6 \\\text { Adiustment to LIFO } & 5.6 & 21.9\end{array}$ Answer the following questions:
A) Describe what costs are included in each of the three types of inventories liste d 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 companys net earnings in 2012 and 2013 ?

Definitions:

Federal Withholding Tax

Income tax withheld from employees' wages and paid directly to the government by the employer, acting as an advance payment of income tax.

Semimonthly Wages

Wages that are paid twice a month, resulting in 24 pay periods within a year.

Self-Employment Taxes

Taxes that must be paid by individuals who work for themselves, covering Social Security and Medicare contributions.

Net Earnings

The amount of income left over after all expenses and taxes have been subtracted from total revenue, often referred to as net income.