Ask Question, Ask an Expert


Ask Accounting Basics Expert

Q1) "Company is engaged in manufacture and sale of chemicals, plastic materials, agricultural and other specialized services" 10-k

The Dow Chemical Company and Subsidiaries
Consolidated Balance Sheets (In Part)
(In Millions) At December 31, 2004 2003
Current Assets $3,108 $2,392
Cash and cash equivalents 84 42
Marketable securities and interest-bearing deposits    
Accounts and notes receivable:    
Trade (net of allowance for doubtful receivable-2004:    
136;2003:$118) 4,753 3,574
Other 2,604 2,356
Inventories 4,957 4,050
Deferred income tax assets-current 384 698
Total current assets $15,890 $13,11

Note D-Inventories
Following table gives breakdown of inventories at December 31, 2004 and 2003:

Inventories at December 31
(In Millions) 2004 2003
Finished Goods $2,989 $2,396
Work in Process 889 837
Raw Materials 605 373
Supplies 474 444
Total inventories $4,957 $4,050

Reserves reducing inventories from \first-in, first-out ("FIFO") basis to \last-in, first-out ("LIFO") basis amounted to $807 million ar December 31,2004 and $330 million at December 31, 2003.

Inventories valued at LIFO basis, principally hydrocarbon and U.S. chemicals and plastics product inventories, represented 39 percent of total inventories at December 31, 2004 and 38 percent of total inventories at December 31, 2003.

Reduction of certain inventories resulted in liquidation of some quantities of LIFO inventory, increasing pretax income $154 million in 2004 and $70 million in 2003, and reducing pretax loss $71 million in 2002.


A. Determine the inventory balance at December 31, 2004

B. Compute the inventory balance at Decmber 31, 2004, without reduction for LIFO reserve?

C. Why would liquidation of some quantities of LIFO inventory increase pretax income in 2004 by $154 million?

D. Must all inventory be costed in the same way? describe.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M919863

Have any Question? 

Related Questions in Accounting Basics

Harmon helmets purchased equipment for 62000 cash sold

Harmon Helmets purchased equipment for $62,000 cash, sold equipment costing $36,000 with a book value of $22,000 at a loss, and declared dividends during 2013. No new notes payable were issued during the year. Financial ...

Prospective analysis forecastingquestion 1glaxosmithkline

Prospective Analysis: Forecasting Question 1. GlaxoSmithKline is one of the largest pharmaceutical firms in the world, and over an extended period of time in the recent past, it consistently earned higher ROEs than the p ...

1 several years ago courtney borrowed 100000 from the

1) Several years ago, Courtney borrowed $100,000 from the Friendly Local Bank and used it to buy an apartment building. Courtney has not been able to rent any of the apartments in the building and has not made any princi ...

What are the effects on equitiesfinancial statement effect

What are the effects on equities? Financial Statement Effect of Equity Securities Presented below is a situation involving equity securities: An equity security, whose fair value is currently less than cost, is classifie ...

Assignment- fraud in the accounting information systemfor

Assignment- Fraud in the Accounting Information System For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case. Explain how the firm's acco ...

Intermediate accounting assignment1 the nail company paid

Intermediate Accounting Assignment 1) The Nail Company paid $1,200,000 to purchase 35% of the outstanding stock of the Toe Corporation. Toe Corporation reports $450,000 of net income and paid a cash dividend of $150,000. ...

Assignmentpaper 1excel spreadsheet and 1-2 pagesconsider

Assignment Paper #1 Excel Spreadsheet and 1-2 pages Consider the following scenario: Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) ...

Incorporation of plummet companyplummet company is created

Incorporation of Plummet Company Plummet Company is created with the following asset contributions. John and Jill are equal owners in this new business venture. Shareholder Assets Basis Fair Market Value John Cash Servic ...

Assignmentapplication break-even analysiswhen expenses and

Assignment Application: Break-Even Analysis When expenses and revenues are equal, this is known as the "break-even point" or BEP. To determine break-even, an examination of fixed and variable costs (expenses) in relation ...

Assignment reorganizationtarget corporation holds assets

Assignment: Reorganization Target Corporation holds assets with a fair market value of $4 million (adjusted basis of $2.2 million) and liabilities of $1.5 million. It transfers assets worth $3.7 million to Acquiring Corp ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro