Reitmans is a Canadian company that specializes in the sale of women’s wear at retail. Exhibits 9-3A to C contain three notes from the company’s 2014 annual report. All figures are expressed in thousands of dollars.
a. Refer to Exhibit 9-3A. Explain why Reitmans uses letters of credit and how the working capital loan relates to them.
b. Refer to Exhibit 9-3B. If Reitman’s costs of goods sold for the year ending February 1, 2014, was $377,913, thousand and the company began the year with $93,317 thousand in inventory and ended with $109,601 thousand, calculate the accounts payable turnover ratio and average payment period.
c. Refer to Exhibit 9-3C and explain in your own words how Reitmans accounts for deferred revenue.

  • CreatedJune 11, 2015
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