1. How much inventory does the company hold on January 29, 2017? Does this represent an increase...

Question:

1. How much inventory does the company hold on January 29, 2017? Does this represent an increase or decrease in comparison to the prior year?

a. $11,809, which is a decrease

b. $11,809, which is an increase

c. $12,549, which is a decrease

d. $12,549, which is an increase

2. What method(s) does the company use to determine the cost of its inventory? Describe where you found this information.

a. LIFO; Note 1

b. FIFO; Note 1

c. Weighted Average Cost; the Balance Sheet

d. Specific Identification; Management’s Discussion and Analysis

3. Compute to one decimal place the company’s inventory turnover ratio and days to sell for the year ended January 29, 2017.

a. 5.1 and 71.6

b. 5.0 and 73.0

c. 7.5 and 48.7

d. 7.8 and 46.8

Refer to the financial statements of The Home Depot in Appendix A at the end of this book. (Note: Fiscal 2016 for The Home Depot runs from February 1, 2016, to January 29, 2017. )

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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