ACC 2101 Lecture Notes - Lecture 4: Gross Profit, Income Statement, Inventory Turnover
Document Summary
American eagle defines the cost of merchandise inventory with either the average cost or the market price, whichever is lower. Average cost method: cost of goods available for sale/total # of goods produced. Also implements the retail method, which estimates the value of inventory with the cost-to-retail price ratio. As of january 31, 2015, american eagle outfitters" total merchandise inventories was. This amount represents the raw materials, incomplete goods, completed goods and thus a part of aeo"s current assets. American eagle refers to its cost of goods sold using a different name. American eagle refers to their cost of goods sold as cost of sales. Cost of goods sold used interchangeably with cost of sales, which includes certain buying, occupancy and warehousing expenses (rent, real estate taxes, personal property taxes, insurance on building and contents, depreciation, and amortization expenses). Cost of sales for the year ended january 31st, 2015 is ,128,193,000.
