P7-3  excel template attached

Cp7-2

Use Urban Outfitters financial statements to answer questions years 2007, 2008, 2009

1. The company uses lower of cost or market to account for its inventory.  At the end of the year, do you expect the company to write its inventory down to replacement cost or net realizable value?  Explain your answer.
2. What method does the company use to determine the cost of inventory?
3. If the company overstated ending inventory by 10 million for the year ended January 31, 2009, what would be the corrected value for income before income taxes?
4. Compute the inventory turnover ratio for the current year,  What does an inventory turnover ratio tell you?

P8-3 template attached

Cp8-2

1. What method of depreciation does the company use.
2. What is the amount of accumulated depreciation and amortization at the end of the most recent reporting year?
3. For depreciation purposes, what is the estimated useful life of furniture and fixtures?
4. What was the original cost of leasehold improvements owned by the company at the end of the most recent reporting year?
5. What amount of depreciation and amortization was reported as an expense for the most recent reporting year?
6. What is the company’s fixed asset turnover ratio for the most recent year?  What does it suggest?