Discussion 8
Accounting for Merchandising Businesses

Computers have become a staple in the lives of most people. There are many companies that provide computers on the market. Assume that you are planning to purchase a new laptop for your classes, work and home use. Please go to the websites of two major United States computer manufacturers such as Hewlett Packard, Acer, Apple, etc. and make a selection.

Once you have made your selection, please complete the following items and questions:

Compare the following items for your selections:
Price
Delivery Charges
Financing Options
Discounts
Coupons
Warranties
Installation Offered
Recycling of Old Components Offered
What are some factors that can impact the gross profit of a merchandise company?
One item that can help investors understand the relationship between net sales and net profits is the gross profit rate. The calculation explanation for this financial ratio is found on page 5-18 of the textbook. Find the financial information needed to calculate the gross profit rate for your two selected companies.
Which company has the better ratio?
Why do you think this is the case?
Please use the most recent annual report available. Also, make sure to use the same years annual report for your companies.

Discussion 9
Inventory Control Methods

Discussion 1: Jason Archer is the CEO of JCPenney (a United States retailer). Because Jason’s bonus is based on the company’s earnings, he has directed the controller to use FIFO as the inventory costing method. Jason did not tell the controller his real reason for the directive; instead, he stated that he thought FIFO better reflected the actual flow of inventory costs. Please review the following links and company websites then answer the questions.

The University Record Online: University of Michigan
JCPenney
Macys
Jason’s decision to select FIFO appropriate? Is it ethical? Is Jason wrong if this will help the company and also benefit him too?
What are some of the pitfalls of a company basing a managers or CEOs compensation on the companys earnings?
Using the links provided for JCPenney and Macys (a United States retailer); determine the inventory turnover ratio for the companies. What does this ratio tell you about these companies? How do the companies compare? You can reference page 6-18 in your textbook.
Using the links provided for JCPenney and Macys, calculate the number of days in inventory for the companies. What does this ratio tell you about these companies? How do the companies compare? You can reference page 6-18 in your textbook.
Source: The University Record Online: University of Michigan. Retrieved from http://www.ur.umich.edu/0304/Jan19_04/10.shtml

Source: JCPenney. Retrieved from http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-irHome

Source: Macys, Inc.  Retrieved from https://www.macysinc.com/

Each discussion most be a minimum of 100 words