ATC 5-8 Research Assignment Analyzing inventory at Gap Company
Using either Gap’s most current Form 10-K or the company’s annual report, answer the questions below. To obtain the Form 10-K, use either the EDGAR system, following the instructions in Appendix A, or the company’s website. The company’s annual report is available on its website.
Required
a. How many stores did Gap operate at year-end? (Do not include “Franchise store locations.”)
b. What was the average amount of inventory per store? Use all stores operated by The Gap, Inc., not just those called The Gap. (Hint: The answer to this question must be computed. The number of stores in operation at the end of the most recent year can be found in the MD&A of the 10-K.)
c. Using the quarterly financial information in the 10-K, complete the following chart:
Quarter Sales during Each Quarter
1 $
2
3
4
d. Referring to the chart in Requirement c, explain why Gap’s sales vary so widely throughout its fiscal year. Do you believe that Gap’s inventory level varies throughout the year in relation to sales?
ATC 5-9 Spreadsheet Analysis Using Excel
At January 1, Year 2, the accounting records of Ginger’s Boutique had the following balances:
Cash $1,000
Inventory 2,250 (150 units @ $15)
Common stock 2,000
Retained earnings 1,250
During January, Ginger’s Boutique entered into five cash transactions:
- Purchased 120 units of inventory @ $16 each.
- Purchased 160 units of inventory @ $17 each.
- Sold 330 units of inventory @ $30 each.
- Incurred $1,700 of operating expenses.
- Paid income tax at the rate of 30 percent of income before taxes.
Required
a. Set up rows 1 through 10 of the following spreadsheet to compute cost of goods sold and ending inventory, assuming (1) FIFO, (2) LIFO, and (3) weighted-average cost flows. Notice that the FIFO cost flow has already been completed for you. Use columns O through W to complete the LIFO and weighted-average cost flow computations. Be sure to use formulas for all calculations.
b. In rows 13 through 31, compute the amount of net income and net cash flow from operations under FIFO, LIFO, and weighted average. The FIFO column has been provided as an example.
ATC 5-10 Spreadsheet Assignment Mastering Excel
Required
Complete ATC 5-5 using an Excel spreadsheet.
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