Problem -
Incorporated in Virginia in 1924, Hooker Furniture Corporation's (NASDAQ: HOFT; Martinsville, VA; hereafter, "Hooker" or "the Company") is ranked among the nation's top 10 largest publicly traded furniture sources, based on 2013 shipments to U.S. retailers, according to a 2014 survey published by Furniture Today. Answer the following questions based on Hooker's 10-K for the year ended February 1, 2015 (hereafter, "fiscal 2015" or "2015"). Show computations for your responses to quantitative questions.
What was the journal entry that the Company recorded during 2015 to (a) accrue bad debt expense, and (b) write-off uncollectible accounts? (HINT: Refer to related footnotes!)
What was the amount of cash collected from customers during 2015? Assume that any cash received related to the "Receivable from factor" account is also "cash collected from customers" for purposes of this question. (HINT: Review the similar calculation that we completed during our live session!)
What is the Company's Inventory Turnover ratio for 2015?
What inventory cost flow assumption does the Company apply for 2015?
What would each of the following items have been if all inventories had been recorded using the FIFO cost flow assumption?
(a) Ending inventory for 2015 and for 2014?
(b) Cost of Goods Sold for 2015?
(c) Inventory Turnover Ratio for 2015?