Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 7, Problem 11EA
To determine
Determine inventory turnover and day’s inventory on hand for 2013 and 2014.
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Cent Discount Stores is assessing its levels of inven-tory for 2013 and 2014 and has gathered the following data (see image).
Compute the inventory turnover and days’ inventory on hand for 2013 and 2014 (round to one decimal place), and comment on the results.
Rockingham Communications reported the following figures in its annual financial statements:
n to view the figures.)
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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
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Cost of Goods Sold
Beginning Merchandise Inventory
Ending Merchandise Inventory
Done
C…...
$ 18,200
560
420
X
=
=
Inventory turnover
times
Broadway Communications reported the following figures in its annual financial statements:
E (Click the icon to view the figures.)
Compute the rate of inventory turnover and days' sales in inventory for Broadway 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
two decimal places, X.XX.)
Inventory turnover
times
Data Table
Cost of Goods Sold
2$
18,400
Beginning Merchandise Inventory
560
Ending Merchandise Inventory
450
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Chapter 7 Solutions
Principles of Accounting
Ch. 7 - Prob. 1DQCh. 7 - Which of the following methods do not require a...Ch. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 1SECh. 7 - Assume the following data with regard to inventory...Ch. 7 - Prob. 3SE
Ch. 7 - Prob. 4SECh. 7 - Prob. 5SECh. 7 - Prob. 6SECh. 7 - Prob. 7SECh. 7 - Prob. 8SECh. 7 - Prob. 9SECh. 7 - Prob. 10SECh. 7 - Prob. 11SECh. 7 - Prob. 12SECh. 7 - Prob. 1EACh. 7 - Prob. 2EACh. 7 - Prob. 3EACh. 7 - Prob. 4EACh. 7 - Prob. 5EACh. 7 - Prob. 6EACh. 7 - During July 2014, Micanopy, Inc., sold 500 units...Ch. 7 - Prob. 8EACh. 7 - Prob. 9EACh. 7 - Prob. 10EACh. 7 - Prob. 11EACh. 7 - Prob. 12EACh. 7 - Midori Company merchandises a single product...Ch. 7 - The inventory of Wood4Fun and data on purchases...Ch. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6APCh. 7 - DiPaolos inventory, purchases, and sales for March...Ch. 7 - Prob. 8APCh. 7 - Prob. 9APCh. 7 - Zubac Company is a large retail furniture company...Ch. 7 - Prob. 1CCh. 7 - Prob. 2CCh. 7 - ExxonMobil Corporation had net income of 41.0...Ch. 7 - Prob. 4CCh. 7 - JCPenney, a large retail company with many stores,...
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- Computing the rate of inventory turnover and days’ sales in inventory Broadway Communications reported the following figures in its annual financial statements: Compute the rate of inventory turnover and days’ sales in inventory for Broadway Communications. (Round to two decimal places.)arrow_forwardTo answer the following questions, use the following information. Round to 1 decimal place for percentages. 2018 2017 2016 Cost of merchandise sold 20,441 19,038 17,405 Inventories 5,261 5,055 4,838 Required: A. Calculate the inventory turnover for the Years 2017 and 2018. B. Calculate the days' sales in inventory for the Years 2017 and 2018. C. Is the change in both the inventory turnover and the days' sales in inventory from 2017 to 2018 favorable or is it unfavorable? Explain your answer.arrow_forwardIn preparing financial statements for the year ended 31 March 2015, the inventory count was carried out on 4 April 2015. The value of inventory counted was GHS36m. Between 31 March and 4 April goods with a cost of GHS2.7m were received into inventory and sales of GHS7.8m were made at a mark-up on cost of 30%. At what amount should inventory be stated in the statement of financial position as at 31 March 2015? A. GHS32.7m B. GHS39.3m C. GHS38.76m D. GHS33.24marrow_forward
- ZEBRA MUSIKAHAN CO. sells musical instruments. In your audit of the company's financial statements for the year ended December 31, 2016, you have gathered the following data concerning inventory. At December 31, 2015, the balance in Zebra's Inventory account was P502,000, and the Allowance for Inventory Writedown had a balance of P32,000. The relevant inventory cost and market data at December 31, 2016, are summarized in the schedule below. Cost Replacement Cost Sales Price Net Normal Realizable Profit Value Guitars Xylophones Trumpets Violins Total P89,000 94,000 125,000 194,000 P502,000 P86,000 92,000 135,000 114,000 P427,000 P91,500 93,000 129,000 205,000 P518,500 P87,000 85,000 111,000 197,000 P480,000 P6,400 7,440 11,610 20,500 P45,950 23. What is the proper balance in the Allowance for Inventory Writedown at December 31, 2016? a. P75,000 b. P22,000 c. P32,000 d. P25,000 24. The adjusting entry on December 31, 2016, to arrive at the proper allowance balance should be a. Allowance…arrow_forwardThe 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?arrow_forwardRecords from FDNACCT Co. revealed the following data: Inventory, January 1 = P130,000 Physical count, December 31= P400,000 The company uses the periodic inventory system and follows the calendar year. How much should be credited to Income Summary to reflect the ending inventory?arrow_forward
- This information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation for a recent year. General Motors uses the LIFO inventory method. Instructions(a) Calculate the inventory turnover ratio and days in inventory.(b) Calculate the current ratio based on inventory as reported using LIFO.arrow_forwardUse the following financial information to find the entry you would make on an income statement for COST OF GOODS SOLD for the year ended December 31, 2011: Gross Sales, $241,000; Sales Returns and Allowances, $5,600; Sales Discounts, $1,000; Merchandise Inventory, January 1, 2011, $62,500; Merchandise Inventory, December 31, 2011, $70,200; net purchases, $95,600; Freight In, $525; Salaries, $93,800; Rent, $17,900; Utilities, $1,325; Insurance, $2,025; and Income Tax, $16,950. O $38,200 $70,525 O $88,425 $234,400 Xarrow_forwardThe management of Gresa Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2017 if either the FIFO or the LIFO method had been used. For 2017, the accounting records show these data: Inventories Purchases and Sales Beginning (7,000 units) $14,000 Total net sales (236,000 units) $1,038,400 Ending (21,000 units) Total cost of goods purchased (250,000 units) 596,500 Purchases were made quarterly as follows. Quarter Units Unit Cost Total Cost 1 65,000 $2.20 $143,000 2 55,000 2.30 126,500 3 55,000 2.40 132,000 4 75,000 2.60 195,000 250,000 $596,500 Operating expenses were $150,000, and the company’s income tax rate is 30%. Prepare comparative condensed income statements for 2017 under FIFO and…arrow_forward
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