The Financial Times reported that Delphi, Inc., a manufacturer of automotive parts, would take a ($100) million
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The Financial Times reported that Delphi, Inc., a manufacturer of automotive parts, would take a \($100\) million write-down of its inventory to reflect reduced demand for some of its products.
The write-down was part of the company’s efforts to restructure its money-losing operations. Discuss what accounting principle is being followed by Delphi when it implements the inventory write-down. Discuss how the write-down will affect the company’s financial statements. Discuss how the write-down will affect the company’s inventory turnover ratio and its inventory-on-hand period. Could an inventory write-down be used to manage earnings? If so, how?
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Related Book For
Financial Accounting For Executives And MBAs
ISBN: 9781618531988
4th Edition
Authors: Wallace, Simko, Ferris
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