This website uses cookies to ensure you have the best experience. Learn more

Inventory Accounting At Wal Mart Stores

1130 words - 5 pages

From the annual reports we can conclude that Wal-Mart operates its stores as mass discount retailers, carrying between 60,000 and 90,000 different merchandise items in each store. Wal-Mart purchases more than $22 billion in merchandise, turning its inventory over as often as 4.5 times per year. Sam Club carries between 3,500 and 5,000 different merchandise items, acquiring more than $2.6 billion in merchandise. Wal Marts operations grew from 2003 to 2005. For example, the number of Wal-Mart stores increased and the number of Sam's stores increased. WalMart utilized an extensive distribution and tracking system to maintain optimal inventories at each store. They use the retail last-in, ...view middle of the document...

Forty-five days prior to conducting a physical inventory in one of its stores, Wal-Mart's internal audit department sends the store a preparation package, which included instructions on how to prepare for the physical count. Each physical count is then conducted by a team of independent counters (18 to 40 persons) and representatives from Wal-Mart's loss prevention department (1 to 2 persons), internal audit department (1 to 3 persons), and operations division (1 to 2 persons). Wal-Mart's independent auditors, Ernst & Young, also sent representatives to randomly selected physical counts to test their accuracy. The independent counters generally counted every inventory item. The results of the physical count were then reconciled with the book inventory. The reconciliations is reviewed by Wal-Mart's internal audit department. Generally, Wal-Mart does not record the results of a physical inventory in its books until the following month.Sam's Club conducs its physical inventories in the same manner except that physical counts are usually taken twice a year and recorded the very next day. Sam's also periodically conducted item audits, counting the goods on hand for a particular merchandise unit and recording those results the next day. The physical inventories of both Wal-Mart and Sam's usually revealed shrinkage.Shrinkage (or overage) is the difference between the inventory determined from the perpetual inventory records and the amount of inventory actually on hand. Because shrinkage reduces profits, WalMart has devoted extensive resources to monitoring and mitigating shrinkage. There are many causes of shrinkage, including employee theft, customer theft, vendor theft, damage, accounting and recording errors, errors in marking retail prices, cash register errors, markdowns taken and not recorded, errors in accounting for customer returns, and errors in accounting for vendor receipts and returns.Because Wal Mart does not conduct a physical inventory at year-end, its perpetual inventory records do not account for any shrinkage that may have occurred during the period between the date of the last physical inventory and the taxable year-end. The parties refer to this period as the stub period. Left unadjusted, the book records could overstate income because the stub period shrinkage results in a decrease to ending inventory,...

Other Essays On Inventory Accounting At Wal Mart Stores

Defining Public Relations Essay

1337 words - 6 pages -Mart stores, Inc., was names "Largest Corporate Cash Giver" by Forbes magazine. Anytime a large magazine like Forbes and Fortune magazine writes about a company, people automatically think that they are good. Wal-Mart is also known for their donations to charities and scholarships. In 2003, Wal-Mart donated $6.6 Million in holiday donations to thousands of hometown charities and civic groups. Furthermore, Wal-Mart donated $300, 000 to assist the Red

Dollar General Case Study

2669 words - 11 pages the Company's experience.3. External Analysisa. CompetitorsAccording to the case the two major competitors of Dollar General Corporation are:Family dollarDollar treeThese two companies have adopted the same strategy than Dollar General. Their expansion has been fast, they have the same customers, and the same core business. Although they have many customers such as The Talbots, Inc.Fred's, 7-Eleven, Sears Roebuck, Wal Mart, 99 Cents Only Stores

Wal-Mart Automated Training And Assessment System

4205 words - 17 pages and Training departments. This development team will report directly to senior management on the status and challenges of the plan on a monthly basis.The new training process will occur first on a pilot basis at 10 test stores, and proceed on a phased basis when the nationwide rollout begins in October of 2009. Though Wal-mart expects no major obstacles in the rollout process, preparedness for such contingencies is crucial to the plan's success

Group Interaction And Development

996 words - 4 pages -Mart mission of "saving people money so they can live better" (Wal-Mart Stores, Inc., 2009) is observed. The group must work together as a team to provide the customer with the best possible service. The Service Writer greets each customer at their vehicle, assesses the needs and wants of each customer on an individual basis, Then the Service Writer must make suggestions based on their assessment of the vehicle. The Service Technicians perform


3952 words - 16 pages faces a wide array of indirect competitors:Unspecialized discount retailers such as Wal-Mart, Target and Costco.Online retailers such as Dell,, and eBay.Entertainment software stores such as GameStop.Office supply stores such as Staples, OfficeMax, and Office Depot.Home improvement retailers such as Home Depot and Lowe's. Small retailers with little overhead (including internet vendors).While Best Buy has no direct competition, but has a

Censorship Of Music

960 words - 4 pages the music industry very well and shows what artists have to think about when writing songs or what to use as their cover art. Artists with "bad" lyrics have to decide if they want to give up thousands of dollars for not selling them at Wal-Mart and other stores which will not carry albums with "parental advisory" stickers.Before researching this topic, I had no idea how much music was being censored without my knowledge and I am glad that I was able to learn all of this. Next time you go to Wal-Mart and you see a CD, that has been censored, think about what the artist had to sacrifice and then decide if you want to support that type of music censoring industry.

Loblaw Companies

4391 words - 18 pages will fare up against the biggest competitor of all, Wal-Mart. The U.S. company would be introducing full grocery departments to its Canadian stores just like it has done with success in the U.S. When Wal-Mart does start selling pasta and vegetables, its economies of scale will dwarf anything that Canadian chains can offer. In this battle of the food giants, size will be a given.Loblaw should be careful with regards to how it expects to compete with


595 words - 3 pages increase or $0.29 per share, over last year's dividend of $1.59 per share.Walmart reported strong free cash flow2 of $12.7 billion for the 12 months ended Jan. 31, 2013 , an 18.1 percent increase over last year.Wal-Wal-Mart (WMT) is part of the Discount, Variety Stores industry. Wal-Mart's returns have fluctuated greatly over the past five years with an average return of .18%. Wal-Mart still remains above the industry average of -1.98%Three industry

Accounting Reporting Criteria

1207 words - 5 pages Accounting Reporting CriteriaDuring the last few years, the regulatory environment has drastically changed in the United States. The drastic change was done after the Tyco and Enron sandals were uncovered. The new changes are designed to help protect the American public who invest in companies in the United States of America. After the Tyco and Enron sandals, a light bulb went off at the government. The government finally realized that they

Internal/External Factors

616 words - 3 pages Wal-Mart is an extremely successful organization that has achieved its goals of becoming one of the top retail stores in the world. In order to reach the top, managers have to plan, organize, lead, and control each component possible in order for the company to be successful. Internal and external factors can impact the four functions of management within a company. Management's responsibility is to take the four factors into consideration to

Contrast Essay On Internet Shopping

584 words - 3 pages is. When shopping online, there are no lines, price checks, or incompetent cashiers.Another great thing with online shopping is that it doesn't matter if it's 3am - while in your pj's; or if you're in the tub with a laptop beside you. You won't have to be bothered with stores closing early on Sundays, or not being able to shop as early in the morning as you might like. In some cases the nearest Wal-Mart may be miles beyond miles away. This is

Similar Papers

Analysis Of Wal Mart Financial Statement For Year Ended January 31, 2004

528 words - 3 pages Analysis of Wal-Mart Financial Statement for Year Ended January 31, 2004The consolidated financial statements include the accounts of Wal-Mart Stores, Inc. and its subsidiaries. Significant inter company transactions have been eliminated in consolidation. investments in which Wal-Mart has a 20 per cent to 50 percent voting interest and which Management control are accounted for using the equity method.The management at Wal-Mart has developed and

Walmart Essay

3718 words - 15 pages system. Cross docking has enabled Wal-Mart to achieve economies of scale, which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level.A company owned transportation system also

Impact Of Fiscal Policy For Wal Mart Workers

783 words - 4 pages than workers employed in large retail stores, they receive around $9.70 per hour compared to $ 14.01. Also 23% fewer Wal Mart workers are covered by employer-sponsored health insurance. At these low wages many Wal Mart workers rely on public safety net programs to make end meet. This creates hidden costs for California taxpayers. If other large California retailers adopted the wage and benefit standards of Wal Mart it could cost taxpayers an

Wal Mart A Case For Latin American Expansion

2055 words - 9 pages products and services still reflect Wal-Mart's low cost structure, other companies have become more adept at securing market share. A recent example is the on-line music industry which Wal-Mart dominated until February of 2008, at which point Apple's 19% market share surpassed Wal-Mart's 16%.3 Apple gained dominant share despite Wal-Mart pricing its songs at $0.94, a full five cents cheaper than Apple's iTunes cost of $0.99 per song.4Wal-Mart also