Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

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Answer 1

Question

Chapter 18, Problem 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

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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 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 18, Problem 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 18, Problem 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

Answer 6

Chapter 18, Problem 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

Answer 7

Chapter 18, Problem 67P

a.

To determine

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

Answer 8

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

Answer 9

b.

To determine

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

Ch. 18 - Prob. 1DQ Ch. 18 - Prob. 2DQ Ch. 18 - Prob. 3DQ Ch. 18 - Prob. 4DQ Ch. 18 - Prob. 5DQ Ch. 18 - Prob. 7DQ Ch. 18 - Prob. 8DQ Ch. 18 - Prob. 9DQ Ch. 18 - Prob. 10DQ Ch. 18 - Prob. 12DQ

Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

Solution Summary: The author calculates the current year ending inventory under LIFO method by assuming that the cost of last purchased items is 2,124,000. The inventory at the base period price is 1,745,283.

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Compute the current year ending inventory under LIFO method by assuming that the current year ending inventory price is $2,124,000.

Compute the ending inventory prices for the current year under LIFO method by assuming the current year ending inventory price is $1,850,000.

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