Inventory Valuations

Inventory Valuations

Please respond to the following:

From the e-Activity, examine the costs that Wal-Mart includes in inventory and cost of sales. Defend the three (3) descriptions that Wal-Mart used to classify inventories, and suggest two (2) other descriptions that Wal-Mart could include within their notes that would be useful to financial statement users. Justify your response.

Discuss the overall significance of inventory turnover to a retail store. Compare Wal-Mart’s 2012 and 2013 inventory turnover rate, and give your opinion on the way in which Wal-Mart could improve its inventory turnover ratio. Provide a rationale for your response.

The e-activity is

Use the Internet to locate Wal-Mart Corporation’s annual report, and review the financial statements. Be prepared to discuss.

solution preview

Examine the costs that Wal-Mart includes in inventory and cost of sales

The inventory costs for Wal-Mart presents an inclusion of the costs that are incurred in the acquisition of the merchandise inventory that is used for resale. The costs of the products are kept in the inventory until the time during which the merchandise is sold. These costs are the ones that finally become costs of goods sold (Dickie, 2010).

Total word count:672words