Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory. 1. To explain: The finished goods inventory being such relatively small portion of total inventory.

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Answer 1

Question

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

Answer 2

Question

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Expert Solution & Answer

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Answer 4

Question

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Expert Solution & Answer

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Answer 5

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Answer 6

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

Answer 7

Chapter 18, Problem 18.1TIATC

To determine

Finished Goods Inventory: The materials which have been converted into finished goods or the goods ready to sell in the open market is known as the finished goods. The left out stock of finished goods is known as finished goods inventory.

1.

To explain: The finished goods inventory being such relatively small portion of total inventory.

Answer 8

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

Answer 9

To determine

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

Answer 10

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

Answer 11

To determine

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

Answer 12

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Answer 13

To determine

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 18 - Prob. 1QC Ch. 18 - Prob. 2QC Ch. 18 - Dunaway Company reports the following costs for...Ch. 18 - Which of the following is a direct cost of...Ch. 18 - Which of the following is not part of...Ch. 18 - Which of the following accounts does a...Ch. 18 - Questions 7 and 8 use the data that follow....Ch. 18 - Questions 7 and 8 use the data that follow....Ch. 18 - World-class businesses use which of these systems...Ch. 18 - Prob. 10QC

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2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

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Chapter 18 Solutions

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2. To compute: The average cost of goods sold and average gross profit for W’s motor home.

3. To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

4. To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.

Want to see the full answer?

Chapter 18 Solutions

2.

To compute: The average cost of goods sold and average gross profit for W’s motor home.

3.

To compute: The extra profit earned if the cost of goods sold is reduced to competitor’s cost of goods sold that is 86%.

4.

To identify: The change in operating income after the cost of goods sold is reduced to competitor’s average cost of sold that is 86%.