Refer to the financial statements of Reitmans (Canada) Limited and the Notes to the Financial Statements in
Question:
Instructions
Answer the following questions about the company's current and contingent liabilities:
(a) What were Reitmans' total current liabilities at January 28, 2012? What was the increase (decrease) in total current liabilities from the previous year?
(b) Which specific current liabilities and in what order did Reitmans present on the January 28, 2012, balance sheet?
(c) Calculate Reitmans' current ratio, acid-test ratio, receivables, and inventory turnover ratios, and operating cycle for 2012 and 2011. Comment on Reitmans' overall liquidity.
(d) Does Reitmans report any contingencies? If so, where are they disclosed? Explain the nature, amount, and significance of Reitmans' contingencies, if any.
Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a... Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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a Total current liabilities at January 28 2012 were 89132000 There was a 2177000 decrease from the p...View the full answer
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