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Questions 1. What does "write-down" mean? 2. What journal entry would Abercrombie & Fitch have made to write down its merchandise inventory during the year ended January 30, 2016? 3. What impact would the write-down of inventory have had on Abercrombie's assets? Liabilities? Equity? 4. What impact would the write-down of inventory have had on Abercrombie's expenses? Gross margin? Net income? 5. What impact, if any, would the write-down of inventory have had on Abercrombie's current ratio? 6. From an investor standpoint, do you think that the effect of the inventory write-down should be considered when evaluating Abercrombie & Fitch? Explain.
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