Describe in which footnote Company C discusses about its inventory costing method.

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Answer 1

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Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

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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?

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Answer 2

Question

Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

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Answer 3

Question

Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

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Answer 4

Question

Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

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Answer 5

Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

Answer 6

Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

Answer 7

Chapter 5, Problem 1FA

1.

To determine

Describe in which footnote Company C discusses about its inventory costing method.

Answer 8

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

Answer 9

2.

To determine

Describe the method that C Company uses to value its cost of inventory.

Answer 10

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

Answer 11

3.

To determine

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 5 - Prob. 1DQ Ch. 5 - How are the financial statements of a manufacturer...Ch. 5 - What is a cost-flow assumption? Why is a cost-flow...Ch. 5 - If a company had two units that cost 1 each in its...Ch. 5 - Prob. 5DQ Ch. 5 - Prob. 6DQ Ch. 5 - Prob. 7DQ Ch. 5 - Prob. 8DQ Ch. 5 - Prob. 9DQ Ch. 5 - Prob. 10DQ

Describe in which footnote Company C discusses about its inventory costing method.

Solution Summary: The author explains how Company C uses the FIRST IN FIRST OUT method to value its inventory.

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Describe in which footnote Company C discusses about its inventory costing method.

Describe the method that C Company uses to value its cost of inventory.

Calculate the rate of inventory turnover ratio for Company C for 2016 and 2015 and also describe whether the rate of inventory turnover ratio has improved or deteriorated.

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