Obsolete inventory, inventory policy footnotes: Cisco 2013
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A company's annual report usually will identify the inventory method used. You can analyze the effects of the inventory method if you have the income statement and balance sheet of a company. Go to the Cisco website(see attachments).
Address the following questions based on the current year's Annual Report on Cisco's website:
1. At Cisco's fiscal year-end, what was the net inventory on the balance sheet?
2. How has this changed from the previous fiscal year-end?
3. How much of the inventory was finished goods?
4. What inventory method does Cisco use?
5. Is inventory considered a current or noncurrent asset?
6. What is obsolescence? Should all companies report the amount of obsolete inventory on-hand? Why or why not?
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Solution Summary
Your discussion is 271 words plus a cut and paste from portions of Cisco's 2013 Annual Report to illustrate.
Solution Preview
Using the 2013 annual report from www.cisco.com (under investor relations).
1. At Cisco's fiscal year-end, what was the net inventory on the balance sheet?
$1,476 million
2. How has this changed from the previous fiscal year-end?
Prior year was $1,663 so it decreased by $187 millioin.
3. How much of the inventory was finished goods?
All of it. They obtain inventory from distributors and so they ...
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