1.What does “write-down” mean?

2.What journal entry would Abercrombie & Fitch have made to write down its merchandise inventory during the year ended January 30, 2016?

3.What impact would the write-down of inventory have had on Abercrombie’s assets? Liabilities? Equity?

4.What impact would the write-down of inventory have had on Abercrombie’s expenses? Gross margin? Net income?

5.What impact, if any, would the write-down of inventory have had on Abercrombie’s current ratio?

6.From an investor standpoint, do you think that the effect of the inventory write-down should be considered when evaluating Abercrombie & Fitch? Explain.

Answer rating: 100% (QA)

Solution Ans 1 write down is a process that shows an assets value have decreased when the market value of the asset dropes below the assets book value ... View the full answer