Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
26th Edition
ISBN: 9781305392373
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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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
Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
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