Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 5, Problem 64PB
1.
To determine
Calculate the gross profit ratio of Company T for the last two years.
2.
To determine
Calculate the inventory turnover ratio of Company A for the last two years.
3.
To determine
Comment on the information that these comparisons provide.
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The following data were taken from the income statements of MetronixCorporation.
Compute the inventory-turnover ratio for each year. What conclusions concerning the management of the inventory can be drawn from the data?
Rockingham Communications reported the following figures in its annual financial statements:
n to view the figures.)
Question Viewer
Compute the rate of inventory turnover and days' sales in inventory for Rockingham Communications. (Round to two decimal places.)
Select the labels and enter the amounts to compute the inventory turnover. (Enter the amount for average inventory to one decimal place, X.X. Round your answer to two
decimal places, X.XX.)
Data table
+
Print
÷
Cost of Goods Sold
Beginning Merchandise Inventory
Ending Merchandise Inventory
Done
C…...
$ 18,200
560
420
X
=
=
Inventory turnover
times
Use the following information to complete the calculations below.
Cost of goods sold
$195,640
Inventory:
Beginning of year
20,500
End of year
18,628
a. Compute inventory turnover.
b. Compute average daily cost of goods sold using a 365 day year.
c. Compute number of days' sales in inventory. Round your answer to one decimal place.
days
Chapter 5 Solutions
Financial Accounting
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- Use the following information relating to Shana Company to calculate the inventory turnover ratio and the number of days sales in inventory ratio.arrow_forwardCompute Westtown Companys (A) inventory turnover ratio and (B) number of days sales in inventory ratio, using the following information.arrow_forwardSCC Company reported the following for the current year: Net sales Cost of goods sold Beginning balance in inventory Ending balance in inventory Compute (a) Inventory turnover and (b) days' sales In Inventory. Hint Inventory turnover uses average Inventory and days' sales in Inventory uses the ending balance in Inventory. $ 52,000 45,900 2,489 8,400 Complete this question by entering your answers in the tabs below. Inventory Days Sales In Turnover Inventory Compute the days' sales in inventory. Numerator: Days' Sales In Inventory Denominator: =arrow_forward
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