Pronto, Inc Required:
A $\$ 25$ Million on December

Essay

Pronto, Inc. is a major producer of printing equipment. Pronto uses a LIFO cost-flow assumption for inventories. The company's tax rate is 35%. Below is selected financial data for the company.
$\begin{array}{llcc} \text {Pronto, Inc. } & \\ \text { Selected Financial Data } &\\ \text { December31, } &2013&2012&2011\\ \text { (amounts in thousands) } &\\ \text { Inventories(LIFO) } &\$48,454&\$42,369&\$45,388\\ \text { Total Assets} &395,685&384,545&378,122\\ \text { Common Shareholders'Equity} &102,754&98,564&89,455\\\\ \text { Sales} &\$546,258&\$488,965&\\ \text {Cost of Goods Sold } &393,857&348,920&\\ \text { Interest Expense } &14,253&15,689&\\ \text {Net Income } &24,581&21,025&\\\end{array}$
Required:
a. The excess of FIFO over LIFO inventories was $\$ 25$ million on December $31,2013, \$ 28.5$ million on December 31 , 2012 and $\$ 22$ million on December 31, 2006. Compute the cost of goods sold for Pronto, Inc. for years 2013 and 2012 assuming that it had used a FIFO assumption
b. Compute the invent ory tunover ratio for Pronto, Inc. for years 2013 and 2012 using a LIFO cost-flow assumption
c. Compute the inventory tunover ratio for Pronto, Inc. for years 2013 and 2012 using a FIFO cost-flow assumption
d. Compute the rate of return on assets for years 2013 and 2012 based on the reported amounts. Disaggregate ROA into profit margin and asset tunover components.
e. Compute the rate of retun on assets for years 2013 and 2012 assuming that Pronto, Inc. had used the FIFO method of accounting for inventories. Disaggregate ROA into profit margin and asset turnover components.