Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

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Answer 1

Question

Chapter 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

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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 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

Answer 6

Chapter 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

Answer 7

Chapter 7, Problem 8BE

a.

To determine

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

Answer 8

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

Answer 9

b.

To determine

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

Answer 10

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

Answer 11

c.

To determine

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 7 - Prob. 1STQ Ch. 7 - Prob. 2STQ Ch. 7 - Prob. 3STQ Ch. 7 - Prob. 4STQ Ch. 7 - Prob. 5STQ Ch. 7 - 6. Which of the following best describes the...Ch. 7 - On January 1, Dillon Company had a $3,100 credit...Ch. 7 - Under the direct write-off method of accounting...Ch. 7 - Which of the following actions is least likely to...Ch. 7 - Prob. 10STQ

Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

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Ascertain the accounts receivable turnover rate of Corporation MCB and Corporation ABI.

Ascertain the number of days Corporation MCB and Corporation ABI, take to collect the accounts receivables.

Analyze the answers computed in Parts (a) and (b) and indicate the company whose accounts receivable appear to be more liquid.

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Chapter 7 Solutions