Walgreen Company

A situation in which a company using LIFO accounting sells its oldest inventory. LIFO liquidation happens when the company's sales outpace its purchases for inventory. By using the LIFO inventory method this will the older you have to go back, the higher the net income. Inventory is always reported on the balance sheet. As you liquidate older inventory with the LIFO method you decrease your cost of good sold which will increase profitability.

5. In Note 7, Harnischfeger describes the effect of LIFO inventory liquidation on its reported profits in 1984.  Describe what is meant by LIFO liquidation and how liquidation affects a company’s income statement and balance sheet.

The effect of LIFO inventory liquidation was an increase in 1984 net income by $2.4 million, as gains. The balance sheet also reflected an improvement in liquidity.

I visited Walgreens today because I wanted to print out some of my pictures, and also I wanted to buy a digital camera for my mom. I choose Walgreens because it is one of the best company in photos and in the selling of digital cameras. My experience in using interactive tools, and digital displays was very interesting.

In the summary of significant accounting policies, what is American Eagle's procedure in accounting for inventory? pA-12

After reading Chapter 6 of the textbook and the materials I found that I was struggling to understand the material more than usual. Before reading this chapter I had a slight idea of how much effort went into keeping track of the costs and inventory. The most that I knew was that you had to keep track of it, I didn’t know that there are different ways to keep track of those costs. After reading more into the different ways to keep track of inventory I found that the one that stuck out most to me and was the one that I spent the most time trying to understand was the LIFO (Last In First Out).

330-10-30330-10-30-1 The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations. 330-10-30330-10-30-2 Although principles for the determination of inventory costs may be easily stated, their application, particularly to such inventory items as work in process and finished goods, is difficult because of the variety of considerations in the allocation of costs and charges.

Section 330-10-35-9 states that the most common method is to apply the lower of cost or market to each individual item of inventory. However, Section 330-10-35-10 states that when there is more than one ending product, the application of the lower of cost or market rule to the total of the items included in such major categories may result in the most useful determination of income. Therefore, since the company has three different types of inventory (live hogs ready for sale, developing animals, and processed pork products) and there are different types of ending products (live animals and processed products suchs as loins, hams, and bacon) the lower of cost or market should be applied to the total of the items included in such major categories, i.e. live hogs ready for sale, developing animals, and processed pork products.

-The was a liquidation of LIFO inventory quantities carried at lower cost compared with the current cost of their acquisitions. Because of this, COGS decreased.

Two days after Hurricane Katrina struck New Orleans, the Walgreen's store at the corner of Royal and Iberville streets remained locked. The dairy display case was clearly visible through the widows. It was now 48 hours without electricity, running water, plumbing. The milk, yogurt, and cheeses were beginning to spoil in the 90-degree heat. The owners and managers had locked up the food, water, pampers, and prescriptions and fled the City.Outside Walgreen's windows, residents and tourists grew increasingly thirsty and hungry. The much-promised federal, state and local aid never materialized and the windows at Walgreen's gave way to the looters. There was an alternative. The cops could have broken one small window and distributed the nuts, fruit

Knowing the importance of a strategic vision, every company undertakes a complete analysis periodically. In order to create a strategic plan the parties involved must know every aspect of the industry and the company at hand. The purpose of this paper is to describe and analyze the retail drugstore industry and then focus on Walgreens, the industry leader in terms of sales. As part of the in-depth analysis of Walgreens, its major competitors will also be described and analyzed. The retail drugstore industry consists of all those stores that contain a pharmacy and sell prescription drugs. It also includes businesses that sell prescription drugs online and through the mail. Most retail drugstores also offer other

Walgreens on the other hand only focuses on one inventory method. Walgreens uses the Last- In, First-Out (LIFO) method for the entire business. In the LIFO method items bought last are sold first, which also means that the items still in stock are the oldest ones. Walgreens focuses in the method because it limits lower of cost or market approach, but not better than weighted average cost. Basically they

b. The inventory write down recorded, as an expense by the company is $4.4 million. It is measured at lower of cost and net realizable value. Cost is measured by weighted average using standard cost method or

The number of LIFO layers affects the LIFO reserve. The LIFO layers are created when number of units purchased exceeds the number of sold. Creation of these layers results the ending inventory containing old inventory with old prices. And it effects the LIFO reserve because it is computed from the difference of LIFO ending inventory and the amount found using another method such as FIFO or average cost. Also, the Caterpillar uses 65% of its inventories whereas the Ford uses just 32% of its inventories and that’s huge percentage difference causes the Caterpillar reserve to be larger than the Ford’s.