Gildan Activewear Inc is a Canadian vertically integrated manufacturer and
Gildan Activewear Inc. is a Canadian vertically integrated manufacturer and marketer of quality branded basic family apparel, including T- shirts, fleece, sport shirts, socks, and underwear. The following information was reported in Note 9 to the company’s financial statements for fiscal year 2012:
Required:
1. Assuming that Gildan did not have any asset impairment losses and did not sell any property, plant, and equipment in fiscal year 2012, what was the amount of depreciation expense recorded in 2012?
2. Assume that Gildan failed to record depreciation in 2012. Indicate the effect of the error (i.e., overstated or understated) on the following:
(a) Earnings per share
(b) Fixed asset turnover ratio
(c) Current ratio
(d) Return on equity.
Computations are not required.
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