Can somebody explain to me how to make this conversion int he context of problem 4.C. in the FSA text. It is on page 341, reading 35. I understand you find FIFO by using the LIFO reserve but I dont understand how to make this conversion given the information in this problem. Thanks: Look at the 2 B.S. of these 2 companies… Zenab: 20X1 20X2 Cash 500 100 AR 8100 8300 Inventory 24900 25200 Current Assets 33500 33600 Current Liabilities 11600 12700 Faybech Cash 1000 600 AR 11400 13900 Inventory 22300 30300 Current Assets 34700 44800 Current Liabilities 10700 12200 Zenab uses LIFO method for 70% of its inventories, and FIFO for remainder. If all inventories of Zenab were carried at FIFO inventory will be higher by 3600 and 5100 respectively. Faybech uses FIFO for all inventories. Income Statement for both companies: Year end 20X2 Zenab Faybech Sales 92700 77000 COGS 61300 52000 Gross Profit 31400 25000 SG&A 26400 21500 Pretax Income 5000 3500 Income Tax Expense 2000 1400 Net Income 3000 2100 Calculate Current, Inv. Turnover, Gross Profit margin, and Pretax profit margin with both companies on FIFO, LIFO and WAC… I know its a pain to go through all this but anyone who can help me I will be very thankful.