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Spreadsheet Supplement for case 193143

Summit Distributors was in danger of violating loan covenants because of slow economic activity and forecasted losses and was faced with a choice. Changing the inventory valuation method from LIFO to FIFO would avoid default but would require higher future income taxes. Not changing could mean default on covenants, renegotiating loan terms at less favorable interest rates, or possible bankruptcy.

Describes the outcome of the deliberations at Summit Distributors. To be distributed in class following discussion of the (A) case.

Spreadsheet Supplement for case 193053