Inferring Transactions from Financial Statements Abercrombie & Fitch Co. (ANF) i
ID: 2549378 • Letter: I
Question
Inferring Transactions from Financial Statements
Abercrombie & Fitch Co. (ANF) is a specialty retailer of casual apparel. The following information is taken from ANF's fiscal 10 -K report for the fiscal year 2013, which ended February 1, 2014. (All amounts in $ thousands.)
Selected Balance Sheet Data February 1, 2014 February 2, 2013
Inventory $607,792 $504,562
Accrued compensation 95,578 120,447
a. ANF reported Cost of Goods Sold of $4,341,782 (thousand) for its fiscal year 2013. What was the cost that ANF incurred to acquire inventory for its fiscal year 2013 ?
$ (thousand)
b. Assume that ANF reported Compensation Expense of $727,600 (thousand) for its fiscal year 2013. What amount of compensation was paid to its employees for fiscal year 2013 ?
$ (thousand)
c. Where would you expect ANF to report its balance of Accrued Compensation? Reported as a Curent liability or current asset on the balance sheet.
Explanation / Answer
a. Cost incurred to acquire inventory = Closing inventory + Cost of Goods Sold - Beginning Inventory
= $ 607,792 thousand + $ 4,341,782 thousand - $ 504,562 thousand
= $ 4,445,012 thousand
$ 4,445,012 thousand is the cost that ANF incurred to acquire inventory for its fiscal year 2013.
B. Amount of compensation paid to employees = Beginning Accrued compensation + Compensation Expenses for the year - Ending Accrued Compensation Expense
= $ 120,447 thousand + $ 727,600 thousand - $ 95,578 thousand
= $ 752,469 thousand.
Therefore, amount of compensation which was paid to ANF employees for fiscal year 2013 would be $ 752,469 thousand.
c. ANF would report its balance of Accrued Compensation as a current liability in the liabilities portion on the balance sheet.
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