The following is information for Palmer Company. Cost of goods sold Ending inventory Year 3 $ 588,825 101,900 Year 2 $ 371,650 92,250 Year 1 $ 336,300 97,000 Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, and Year 2. From Year 2 to Year 3, did Palmer improve its (a) inventory turnover and (b) days' sales in inventory? Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2. Inventory turnover Days' sales in inventory Numerator Denominator = $ 371,650 / $ 94,625 = × 365 = Ratio 3.9 times 0 Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. Inventory turnover Days' sales in inventory Numerator 1 Denominator $ 588,825 / = × 365 = Ratio 0 0 Did Palmer improve its (a) inventory turnover from Year 2 to Year 3 and (b) days' sales in inventory from Year 2 to Year 3? (a) Did Palmer improve its inventory turnover from Year 2 to Year 3? (b) Did Palmer improve its days' sales in inventory from Year 2 to Year 3? Yes Yes

The following is information for Palmer Company. Cost of goods sold Ending inventory Year 3 $ 588,825 101,900 Year 2 $ 371,650 92,250 Year 1 $ 336,300 97,000 Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, and Year 2. From Year 2 to Year 3, did Palmer improve its (a) inventory turnover and (b) days' sales in inventory? Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2. Inventory turnover Days' sales in inventory Numerator Denominator = $ 371,650 / $ 94,625 = × 365 = Ratio 3.9 times 0 Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. Inventory turnover Days' sales in inventory Numerator 1 Denominator $ 588,825 / = × 365 = Ratio 0 0 Did Palmer improve its (a) inventory turnover from Year 2 to Year 3 and (b) days' sales in inventory from Year 2 to Year 3? (a) Did Palmer improve its inventory turnover from Year 2 to Year 3? (b) Did Palmer improve its days' sales in inventory from Year 2 to Year 3? Yes Yes

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Description: The following is information for Palmer Company.Cost of goods soldEnding inventoryYear 3$ 588,825101,900Year 2$ 371,65092,250Year 1$ 336,30097,000Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in i

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 58E: Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following...

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