The following information was summarized
Problem 5-8A  Walgreen’s Sales, Cost of Goods Sold, and Gross Profit The following information was summarized from the consolidated balance sheets of Walgreen Co. and Subsidiaries as of August 31, 2012 and 2011 and the consolidated statements of earn-
ings for the years ended August 31, 2012 and 2011. All amounts are from Walgreen’s 2012
Form 10-K.
(in millions)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2012Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2011
|
Accounts receivable, net
|
$ Â 2,167
|
$ Â 2,497
|
|
Cost of sales
|
51,291
|
51,692
|
|
Inventories
|
7,036
|
8,044
|
|
Net sales
|
71,633
|
72,184
|
Required
1.       Prepare the appropriate journal entry related to the collection of accounts receivable and sales during 2012. Assume that all of Walgreen’s sales are on account
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2.       Walgreen Co. sets forth net sales but not gross sales on its income statement. What type(s) of deduction(s) would be made from gross sales to arrive at the amount of net sales reported? Why might the company decide not to report the amount(s) of the deduction(s) separately?
3.       Reconstruct the Cost of Goods Sold section of Walgreen’s 2012 income statement.
4.       Calculate the gross profit ratios for Walgreen Co. for 2012 and 2011 and comment on the change noted, if any. Is the company’s performance improving? What factors might have caused the change in the gross profit ratio?
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Answers
Status NEW
Posted 09 May 2017 12:05 PM
My Price 8.00
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file 1494332534-1416652_1_636298225129128390_cost-of-sales-and-Gross-profit-ratio.xlsx preview (414 words )
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