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 12SE
To determine
Compute the inventory turnover ratio and Day’s inventory on hand ratio.
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Elephant, Inc.'s cost of goods sold for the year is $1,900,000, and the average merchandise inventory for the year is $132,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.)
The Holden Corp. company has the following purchases and sales
during the year ended December 31, 2014.
Inventory and Purchases
Beginning: 130 units@ $51/unit
March 28: 150 units @ $54/unit
June 28: 150 units @ $50/unit
The units have a selling price of $65.00 per unit.
a) Please fill in the table by calculating the dollar value of cost of goods
sold and ending inventory, as well as the gross profit earned by Holden
Corp. using the FIFO system.
Cost of Goods Sold
Ending Inventory
Gross Profit
Date
b) Prepare journal entries to record the following (assuming all sales and
purchases are for cash): (a) The purchase on June 28, (b) The sale on
July 17. Enter the transaction letter as the description when preparing a
journal entry. When a transaction requires two separate journal entries,
use the same letter for both descriptions. Dates must be entered in the
format dd/mmm (ie. 15/Jan).
14
F
Sales
February 9:30 units
July 17: 200 units
FIFO
E
General Journal
Account/Explanation
Page GJB
F…
The ITM trading company provides you the following data for the year 2016:
Inventory turnover ratio: 12 times
Opening inventory at cost: $36,000
Closing inventory at cost: $54,000
Calculate cost of goods sold for the year 2016
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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- Langstons purchased $3,100 of merchandise during the month, and its monthly income statement shows a cost of goods sold of $3,000. What was the beginning inventory if the ending inventory was $1,250?arrow_forwardLast year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?arrow_forwardLogo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement shows cost of goods sold of $2,000. What was the beginning inventory if the ending inventory was $1,000?arrow_forward
- The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: During the year, Arnn had net sales of 2.45 million. The cost of goods sold was 1.3 million. Required: Note: Round all answers to two decimal places. 1. Compute the current ratio. 2. Compute the quick or acid-test ratio. 3. Compute the accounts receivable turnover ratio. 4. Compute the accounts receivable turnover in days. 5. Compute the inventory turnover ratio. 6. Compute the inventory turnover in days.arrow_forwardReid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.arrow_forwardOn January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the year. On its year-end income statement, Pope reported cost of goods sold of 1,025,000. Calculate Popes December 31 ending inventory.arrow_forward
- Assume your company uses the periodic inventory costing method, and the inventory count left out an entire warehouse of goods that were in stock at the end of the year, with a cost value of $222,000. How will this affect your net income in the current year? How will it affect next years net income?arrow_forwardAt December 31, 2014, the following information was available for A. Kamble Company: ending inventory $40,200, beginning inventory $57,470, cost of goods sold $276,700, and sales revenue $396,000. Calculate inventory turnover for A. Kamble Company. (Round answer to 1 decimal place, e.g. 1.5.)arrow_forwardOn January 1, Veltron International has inventory worth $599,900 at cost. At the end of the year, the cost value of the inventory was $171,200. If annual cost of goods sold was $1,209,170, find the inventory turnover at cost for the year. Round your answer to the nearest tenth.arrow_forward
- 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. daysarrow_forwardCompute Altoona Company's (a) inventory turnover ratio and (b) number of days' sales in inventory ratio, using the following information. Use 365 days year. Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place. Cost of Goods Sold $727,000 Beginning Inventory 60,000 Ending Inventory 73,000 (a) Inventory Turnover Ratio (b) Number of Days' Sales in Inventory Ratioarrow_forwardCompute the Days-in-Inventory for the Year End Dec-31-2016, given the Following; Cost of Goods Sold for 12-31-2016= 150,000 Cost of Goods Sold for 12-31-2015= 200,000 Ending Inventory 12-31-2016 = 60,000 Ending Inventory 12-31-2015 = 20,000 Sales Revenues 12-31-2016 $750,000 Sales Revenues 12-31-2015 = $900,000 = Inventory Turnover Ratio = COGS / Average Inventory Days-in-Inventory = 365/ Inventory Turnover Ratio None of These Choices 97 Days 48 Days 49 Days 146 Daysarrow_forward
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