Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for
Question:
Required:
1. What inventory method(s) does Target use to value its inventories?
2. In addition to the purchase price, what additional expenditures does the company include in the initial cost of merchandise?
3. Calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016. Compare Target's ratios with the industry averages of 24.5% and 7.1 times.
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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Requirement 1 Target uses the retail inventory method to account for the majority of its invento...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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