the forzani group ltd is canada s largest sporting goods retailer it operates more t 4375724

The Forzani Group Ltd. is Canada’s largest sporting goods retailer. It operates more than 200 stores across Canada under the names Sport Chek, Sport Mart, and Coast Mountain Sports. The company also franchises stores. Note 2(b) to Forzani’s 2009 financial statements is included in Exhibit 7-15. The company reported the following amounts for inventory and cost of sales in its January 31, 2010, and February 1, 2009, financial statements. Inventory: 2010………………………….. $316,319 thousand 2009………………………….. $291,497 thousand Cost of sales: 2010………………………….. $864,004 thousand 2006………………………….. $863,239 thousand Required: a. Calculate the inventory turnover (by ratio and by days) for The Forzani Group Ltd. for 2010 and 2009, using the inventory value at each year end instead of the average inventory amount. Comment on the results. b. What do you think is meant by freight and distribution costs in Note 2(b)? Is it appropriate that these costs be included in inventory cost? Explain. c. If the company purchases a large shipment of sports shoes from a manufacturer and is given a 10% volume discount on the manufacturer’s usual selling price, how and when does Forzani record the discount? Explain whether you think this is appropriate. View Solution:
The Forzani Group Ltd is Canada s largest sporting goods retailer

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