Macy’s, Inc. is a premier retailer in the United States, operating nearly 867 stores in 43 states. Macy’s, Bloomingdale’s, and bluemercury are all brands that operate under Macy’s, Inc. The company sells a wide range of merchandise including apparel and accessories, cosmetics, home furnishings, and other goods. Macy’s, Inc. purchases its merchandise from many suppliers and also develops its own private label brands.

Requirements
1. Review the notes to the consolidated financial statements, specifically Recent Accounting Pronouncements. When did Macy’s adopt the new revenue recognition standard (ASU No. 2014-09, Revenue from Contracts with Customers)? What impact and changes did the new revenue recognition standard have on Macy’s?
2. Macy’s, Inc. reported cost of sales of $15,215 million for the year ending February 2, 2019. Which financial statement is cost of sales (also known as cost of goods sold) reported on? What does cost of sales represent? What type of account is cost of sales?
3. Assume Macy’s, Inc. purchases $100,000 of inventory from one of its vendors. The terms of the purchase are FOB shipping point. Who pays the freight and how does the cost of the freight get recorded? Assume Macy’s uses the perpetual inventory system.
4. On which financial statement will Macy’s report its merchandise inventory? How much is Macy’s merchandise inventory as of February 2, 2019?
5. Assume Macy’s, Inc. prepares a multi-step income statement. What would the format of that income statement look like?
What is one benefit of preparing a multi-step income statement for merchandising companies such as Macy’s, Inc.?