The financial statements of Shoppers Drug Mart are presented in Appendix A at the end of this

Question:

The financial statements of Shoppers Drug Mart are presented in Appendix A at the end of this book.

Instructions

(a) What amounts did Shoppers report for total inventories in its balance sheet at the end of 2012 and 2011?

(b) Calculate the change in the dollar amount of total inventories between 2012 and 2011 and the percentage change. Next, calculate inventory as a percentage of current assets for each of the two years. Comment on the results.

(c) Shoppers uses the first-in, first-out method. What guidelines do you think influenced Shoppers' choice of cost method?

(d) Refer to Note 9, Cost of goods sold in the financial statements. Did Shoppers write down its inventories to net realizable value in either 2012 or 2011? If so, reproduce the journal entry for the most recent year that Shoppers likely made.

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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...