Question
Under Armour reported the following in its 2018 Form 10K. Under Armours income statement reported 2018 cost of goods sold of $2,852,714 thousand. Its balance
Under Armour reported the following in its 2018 Form 10K. Under Armours income statement reported 2018 cost of goods sold of $2,852,714 thousand. Its balance sheet reported inventories of $1,427,294 thousand in 2018 and $1,621,967 thousand in 2017. Restructuring Plans: As previously announced, our Board of Directors approved restructuring plans designed to more closely align our financial resources with the critical priorities of our business and optimize operations. We recognized approximately $203.9 million of pre-tax charges in connection with our restructuring plan. The costs incurred during the year ended December 31, 2018, include the following:
Costs recorded in cost of goods sold ($ thousands) | 2018 |
---|---|
Inventory write-offs | $20,801 |
Total cost recorded in cost of goods sold | $20,801 |
a. What effect did the 2018 inventory writeoff have on pretax income during 2018?
Note: Do not use a negative sign with your answer.
The 2018 inventory write-off Answerdecreasedincreased pretax income during 2018 by $Answer thousand.
b. Calculate inventory turnover and days inventory outstanding for 2018. Note: Round your answers to one decimal place (for example, enter 6.8 for 6.77555). Inventory turnover: Answer times Note: Do not round until your final answer; round your final answer to the nearest whole day. Days inventory outstanding: Answer days c. If UnderArmour had not written off inventory in 2018, what would it have reported for cost of goods sold in 2018? $Answer thousand d. If UnderArmour had not written off inventory in 2018, what would have been the inventory balances in 2018 and 2017? 2018 inventory balance $Answer thousand 2017 inventory balance $Answer thousand e. Use the adjusted cost of goods sold and inventory balances to recalculate inventory turnover and days inventory outstanding. Did the inventory writeoff make a significant difference? Note: Round your answers to one decimal place (for example, enter 6.8 for 6.77555). Inventory turnover Answer times Note: Do not round until your final answer; round your final answer to the nearest whole day. Days inventory outstanding Answer days
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