A little inventory help please :)

Hey there to all the other people spending a glorious Memorial Day Weekend studying about really neat things…like LIFO vs FIFO inventory valuation…

Anyway, I would really appreciate if someone could explain the solution to numbers 7 & 8 in reading 20 for me. Specifically, why are the “Charges included in cost of goods sold for inventory write-downs” are $13MM and $15MM, respectively? From looking at the exhibit, I feel like they should be $20MM and $25MM. Any help would be much appreciated!

And good luck :slight_smile:

Look lower on the page, right above the LIFO reserve section there thould be an (a) stating Charges included in cost of goods sold for inventory write-downs * 13 and 15, respectively. I made the same initial error and overlooked the small text.

Read the Footnotes — Footnote “a” is

“Charges included in costs of goods sold for inventory write-downs”

It got me too — everytime you approach any FRA questions – or in real life everytime you pop open a 10-q/8-k/10-k – think of Seth Klarman (Head of Baupost).

He is an unbelievable success story that believed in the importance of footnotes so much so that he named one of his racing horses: “Read the Footnotes”