The following data are taken from the financial statements: $$\begin{array} { l r r }
& \text { Current } &{ \text { Preceding } } \
& \text { Year } & \text { Year } \
\text { Net sales } & \$ 3,592,000 & \$ 4,056,000 \
\text { Cost of goods sold } & 2,092,000 & 2,656,000 \
\text { Average monthly inventory } & 332,000 & 328,000 \
\text { Inventory, end of year } & 372,000 & 347,000
\end{array}$$ ?
(a)Determine for each year (1) the inventory turnover and (2) the days' sales in inventory.
(b)Comment on the favorable and unfavorable trends revealed by the data.

Question

The following data are taken from the financial statements: $$\begin{array} { l r r } 
& \text { Current } &{ \text { Preceding } } \
& \text { Year } & \text { Year } \
\text { Net sales } & \$ 3,592,000 & \$ 4,056,000 \
\text { Cost of goods sold } & 2,092,000 & 2,656,000 \
\text { Average monthly inventory } & 332,000 & 328,000 \
\text { Inventory, end of year } & 372,000 & 347,000
\end{array}$$ ?
(a)Determine for each year (1) the inventory turnover and (2) the days' sales in inventory.
(b)Comment on the favorable and unfavorable trends revealed by the data.

Quizplus · Accepted Answer

The Answer of The following data are taken from the financial statements: $$\begin{array} { l r r } 
& \text { Current } &{ \text { Preceding } } \
& \text { Year } & \text { Year } \
\text { Net sales } & \$ 3,592,000 & \$ 4,056,000 \
\text { Cost of goods sold } & 2,092,000 & 2,656,000 \
\text { Average monthly inventory } & 332,000 & 328,000 \
\text { Inventory, end of year } & 372,000 & 347,000
\end{array}$$ ?
(a)Determine for each year (1) the inventory turnover and (2) the days' sales in inventory.
(b)Comment on the favorable and unfavorable trends revealed by the data.

The Following Data Are Taken from the Financial Statements ? (A)Determine for Each Year (1) the Inventory Turnover and

The Following Data Are Taken from the Financial Statements ?
(A)Determine for Each Year (1) the Inventory Turnover and