Refer to the financial statements and Notes to Consolidated Financial Statements for Reitmans…

Refer to the financial statements and Notes to Consolidated Financial Statements for Reitmans (Canada) Limited in Appendix A. Instructions (a) How does Reitmans value its inventory? (b) Which inventory cost formula does Reitmans use? (c) Would using the specific identification cost determination method be appropriate for a women s clothing retailer like Reitmans? Explain. (d) How much did Reitmans record for inventory write downs in fiscal 2012? Was it reported separately on the income statement or included in cost of goods sold? How much did it record for reversals of previous write downs? (e) For 2012 and 2011, calculate Reitmans inventory as a percentage of current assets and its cost of sales as a percentage of total revenue. Comment on the results. (f) Reitmans inventory turnover and days sales in inventory were calculated for fiscal 2012 in this chapter in Illustrations 6-18 and 6-19, respectively. Calculate these same two ratios for fiscal 2011. Comment on whether Reitmans management of its inventory improved or weakened in 2012.