Refer to the financial statements of Express, Inc., given in Appendix C at the end of this

Question:

Refer to the financial statements of Express, Inc., given in Appendix C at the end of this book.

Required:

1. The company uses lower of cost or net realizable value to account for its inventory. At the end of the year, do you expect the company to write its inventory down to net realizable value? Explain your answer. What was the amount of the write-down for the latest year reported? How did you know?

2. What method does the company use to determine the cost of its inventory?

3. If the company overstated ending inventory by $10 million for the year ended February 3, 2018, what would be the corrected value for Income before Income Taxes?

4. Compute the inventory turnover ratio for the current year. What does an inventory turnover ratio tell you?

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,... Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... 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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