Glad Rags,Inc Required:
A

question 48

Essay

Glad Rags,Inc.sells women's clothes.Provided below is selected financial statement information:
$\begin{array}{l}\begin{array}{lll}\text {Glad Rags, Inc.}\\\text {Selected Financial Statement data}\\\text { Fiscal year end}\\\text {(amounts in thousands of dollars)}\\\text {Net sales}\\\text {Cost of Goods Sold}\\\text {Gross profit}\\\text {Inventory}\\\end{array}\begin{array}{lll}\\\\2010&2009\\\\\$ 47,895 & \$ 42,589 \\(35,952) & (32,588)\\\$ 11,943&\$ 10,001 \\\$ 5,548 & \$ 4,948\\\end{array}\end{array}$
Required:
a.Compute the inventory turnover ratio for 2010.
b.Clothes,Inc.projects that sales will grow at a compound rate of 7% per year for years 2011-2013 and that the cost of goods sold to sales percentage will equal that realized in 2010.Compute the projected implied level of inventory at the end of 2011 to 2013.

Differentiate between the single-step and multiple-step income statements.

Understand the inclusion of specific transactions in the general ledger under a perpetual inventory system.

Identify the correct method of recording sales and the use of the MasterCard or VISA in accounting.

Comprehend the different components of the income statement and their relationship with net income.

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Definitions:

Aggregate Planning

A process by which a company determines optimal levels of capacity, production, subcontracting, inventory, and labor for meeting expected demand.

Forecast Quality

The accuracy and reliability of predictions regarding future demand, sales, or other market dynamics.

Supply Chains

Complex networks of suppliers, manufacturers, and distributors that produce, handle, and distribute goods and services from origin to consumer.

Safety Inventory

Extra stock kept in storage to guard against uncertainty in demand or supply, ensuring that a company can meet customer orders without delays.