Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Question
Chapter 4, Problem 10DQ
To determine
Fiscal year: It refers to a financial year having a period of 12 consecutive months. This means that, it starts with the first day of the month chosen by the company and ends on the last day of the twelfth month other than December 31.
To Explain: The general characteristic shared by these companies
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The general merchandise retail industry has a number of segments represented by the following companies:
For a recent year, the following cost of goods sold and beginning and ending inventories arc provided from corporate annual reports (in millions) for these three companies:
a. Determine the inventory turnover ratio for all three companies. Round all calculations to one decimal place.b. Determine the number of days' sales in inventory for all three companies. Use 365 days and round all calculations to one decimal place.
c.Interpret these results based on each company's merchandising concept.
The general merchandise retail industry has a number of segments represented by the
following companies:
Company Name
Costco Wholesale Corporation
Merchandise Concept
Membership warehouse
Wal-Mart
Discount general merchandise
JCPenney Company
Department store
For a recent year, the following cost of merchandise sold and beginning and ending
inventories have been provided from corporate annual reports (in millions) for these
three companies:
Wal-Mart
Costco
JCPenney
$365,086
Cost of merchandise sold
$101,065
$8,074
Merchandise inventory, beginning
Merchandise inventory, ending
45,141
8,908
2,721
8,456
44,858
2,652
a. Determine the inventory turnover ratio for all three companies. Round to two decimal
places.
b. Determine the days' sales in inventory for all three companies. Use 365 days and round
to one decimal place.
c. Interpret these results based on each company's merchandise concept.
The Tampa Manufacturing Company had the following financial data for December 31, the end of the current year:
Cost of Goods Sold $500,000
Beginning Merchandise Inventory 55,000
Ending Merchandise Inventory 45,000
What is the inventory turnover for the year?
Chapter 4 Solutions
Accounting
Ch. 4 - Why do some accountants prepare an end-of-period...Ch. 4 - Describe the nature of the assets that compose the...Ch. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Why are closing entries required at the end of an...Ch. 4 - What is the difference between adjusting entries...Ch. 4 - What is the purpose of the post-closing trial...Ch. 4 - Prob. 8DQCh. 4 - What is the natural business year?Ch. 4 - Prob. 10DQ
Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Statement of owner's equity Marcie Davies owns and...Ch. 4 - Statement of owner's equity Blake Knudson owns and...Ch. 4 - Classified balance sheet The following accounts...Ch. 4 - Classified balance sheet The following accounts...Ch. 4 - Closing entries After the accounts have been...Ch. 4 - Closing entries After the accounts have been...Ch. 4 - Accounting cycle From the following list of steps...Ch. 4 - Accounting cycle From the following list of steps...Ch. 4 - Working capital and current ratio Current assets...Ch. 4 - Working capital and current ratio Current assets...Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Classifying accounts Balances for each of the...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Income statement The following account balances...Ch. 4 - Income statement; net loss The following revenue...Ch. 4 - Income statement FedEx Corporation had the...Ch. 4 - Statement of owners equity Apex Systems Co. offers...Ch. 4 - Statement of owners equity; net loss Selected...Ch. 4 - Classifying assets Identify each of the following...Ch. 4 - Balance sheet classification At the balance sheet...Ch. 4 - Balance sheet Optimum Weight Loss Co. offers...Ch. 4 - Balance sheet List the errors you find in the...Ch. 4 - Identifying accounts to be closed From the list...Ch. 4 - Closing entries Prior to closing, total revenues...Ch. 4 - Closing entries with net income Assume that the...Ch. 4 - Closing entries with net loss Stylist Services Co....Ch. 4 - Identifying permanent accounts Which of the...Ch. 4 - Post-closing trial balance An accountant prepared...Ch. 4 - Steps in the accounting cycle Rearrange the...Ch. 4 - Working capital and current ratio The following...Ch. 4 - Prob. 4.22EXCh. 4 - Completing an end-of-period spreadsheet List (a)...Ch. 4 - Adjustment data on an end-of-period spreadsheet...Ch. 4 - Completing an end-of-period spreadsheet Alert...Ch. 4 - Prob. 4.26EXCh. 4 - Adjusting entries from an end-of-period...Ch. 4 - Closing entries from an end-of-period spreadsheet...Ch. 4 - Reversing entry The following adjusting entry for...Ch. 4 - Adjusting and reversing entries On the basis of...Ch. 4 - Adjusting and reversing entries On the basis of...Ch. 4 - Entries posted to wages expense account Portions...Ch. 4 - Entries posted to wages expense account Portions...Ch. 4 - Financial statements and closing entries Beacon...Ch. 4 - Financial statements and closing entries Finders...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - Financial statements and closing entries Last...Ch. 4 - Financial statements and closing entries The...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - The unadjusted trial balance of PS Music as of...Ch. 4 - Kelly Pitney began her consulting business, Kelly...Ch. 4 - Prob. 4.1CPCh. 4 - Communication Your friend, Daniel Nat, recently...Ch. 4 - Financial statements The following is an excerpt...Ch. 4 - Financial statements Assume that you recently...
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- The general merchandise retail industry has a number of segments represented by the following companies: For a recent year, the following cost of goods sold and beginning and ending inventories are provided from corporate annual reports (in millions) for these three companies: a. Determine the inventory turnover ratio for all three companies. Round all calculations to one decimal place. b. Determine the number of days sales in inventory for all three companies. Use 365 days and round all calculations to one decimal place. c. Interpret these results based on each companys merchandising concept.arrow_forwardThe table below contains selected information from recent financial statements of The Home Depot, Inc., and Lowe's Companies, Inc., two companies in the home improvement retail industry ($ in millions): Home Depot Lowe's 2/2/14 2/3/13 1/31/14 2/1/13 $78,812 $74,754 $53,417 $50,521 33,194 Net sales Cost of goods sold Year-end inventory 51,422 48,912 34,941 11,057 10,710 9,127 8,600 Industry averages: Gross profit ratio 33% Inventory turnover ratio 3.7 times 99 days Average days in inventory Required: Calculate the gross profit ratio, the inventory turnover ratio, and the average days in inventory for the two compa- nies for their fiscal years ending in 2014. Compare your calculations for the two companies, taking into account the industry averages.arrow_forwardThe following figures appear on LaGrange’s financial statements for the most recent fiscalyear: Cost of Goods Sold $1,960,000 Beginning Inventory 238,000 Ending Inventory 278,000 Accounts Payable 182,000 What is the age of this company’s accounts payable? Responses 33.2 days 34.7 days 33.9 days 35.3 daysarrow_forward
- Comparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the back of the book and answer the following questions. What was the total revenue for each company for the most recent year? By what percentage did each companys revenue increase or decrease from its total amount in the prior year? What was each companys net income for the most recent year? By what percentage did each companys net income increase or decrease from its net income for the prior year? What was the total asset balance for each company at the end of its most recent year? Among its assets, what was the largest asset each company reported on its year-end balance sheet? Did either company pay its stockholders any dividends during the most recent year? Explain how you can tell.arrow_forwardRalph Lauren Corporation sells apparel through company-owned retail stores. Recent financial information for Ralph Lauren follows (in thousands): Please see the attachment for details: Assume that the apparel industry average return on total assets is 8.0% and the average return on stockholders’ equity is 10.0% for the year ended April 2, Year 3.a. Determine the return on total assets for Ralph Lauren for fiscal Years 2 and 3. Round percentages to one decimal place.b. Determine the return on stockholders’ equity for Ralph Lauren for fiscal Years 2 and 3. Round percentages to one decimal place.c. Evaluate the two-year trend for the profitability ratios determined in (a) and (b).d. Evaluate Ralph Lauren’s profit performance relative to the industry.arrow_forwardThe New Orleans Adventures financial information for the year ended December 31 is as following: Accounts Amount Sales $24,500,000 Cost of goods sold 10,900,000 Operating expenses 6,300,000 Income tax expense 500,000 Loss on discontinued operations 100,000 Required: Prepare an income statement. Be sure to complete the statement heading. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Enter all amounts as positive numbers. Prepare an income statement. Be sure to complete the statement heading. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Enter all amounts as positive numbers.arrow_forward
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