Debit Company had sales of $550,000 and cost of goods sold of $300,000 during the year. Inventory was $45,000 at the beginning of the year and $55,000 at the end of the year.
Required:
1. Compute the company's gross profit percentage and rate of inventory turnover for the year.
2. For the previous year, the gross profit percentage was 43.5% and inventory turnover was 6.5. Are these amounts improving or deteriorating?

Question

Quizplus · Accepted Answer

The Answer of Debit Company had sales of $550,000 and cost of goods sold of $300,000 during the year. Inventory was $45,000 at the beginning of the year and $55,000 at the end of the year.
Required:
1. Compute the company's gross profit percentage and rate of inventory turnover for the year.
2. For the previous year, the gross profit percentage was 43.5% and inventory turnover was 6.5. Are these amounts improving or deteriorating?

Debit Company Had Sales of $550,000 and Cost of Goods