Refer to the financial statements and notes to consolidated financial statements for Hudson's Bay Company, whose partial financial information is presented in Illustrations 6-14 to 6-16.
Instructions
(a) How does Hudson's Bay Company value its inventory?
(b) Which inventory cost formula does Hudson's Bay Company use?
(c) Would using the specific identification cost determination method be appropriate for an organization like Hudson's Bay Company? Explain.
(d) For 2015 and 2014, calculate Hudson's Bay Company's inventory as a percentage of current assets and its cost of sales as a percentage of total revenue. Comment on the results.
(e) Hudson's Bay Company's inventory turnover and days sales in inventory were calculated for 2015 in this chapter in Illustrations 6-17 and 6-18, respectively. Calculate these same two ratios for 2014. The balance in inventory on February 2, 2013, was $994. Comment on whether Hudson's Bay Company's management of its inventory improved or weakened in 2015.