Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning) $29,000 $55,000 Inventory (ending) 23,000 65,000 Purchases 339,000 177,000 Purchase returns 20,000 65,000 Required: 1. Calculate cost of goods sold for each company. 2. Calculate the inventory turnover ratio for each company. 3. Calculate the average days in inventory for each company. 4. Which company appears to be managing its inventory more efficiently?
Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning) $29,000 $55,000 Inventory (ending) 23,000 65,000 Purchases 339,000 177,000 Purchase returns 20,000 65,000 Required: 1. Calculate cost of goods sold for each company. 2. Calculate the inventory turnover ratio for each company. 3. Calculate the average days in inventory for each company. 4. Which company appears to be managing its inventory more efficiently?
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 17MCQ: ( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory...
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Lewis Incorporated and Clark Enterprises report the following amounts for the year.
| Lewis | Clark | |
|---|---|---|
| Inventory (beginning) | $29,000 | $55,000 |
| Inventory (ending) | 23,000 | 65,000 |
| Purchases | 339,000 | 177,000 |
| Purchase returns | 20,000 | 65,000 |
Required:
1. Calculate cost of goods sold for each company.
2. Calculate the inventory turnover ratio for each company.
3. Calculate the average days in inventory for each company.
4. Which company appears to be managing its inventory more efficiently?
Transcribed Image Text:Amounts
Calculate the inventory turnover ratio for each company.
Inventory Turnover Ratio
Accounts in Ratio
Lewis
Clark
II
II
0 times
=
0 times
Transcribed Image Text:Lewis
Clark
Beginning inventory
$
29,000 $
55,000
Add: Purchase returns
Cost of goods available for sale
Less: Ending inventory
Cost of goods sold
23,000
65,000
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