Inventory Analysis The following data were extracted from the income statement o
ID: 2582775 • Letter: I
Question
Inventory Analysis
The following data were extracted from the income statement of Brecca Systems Inc.:
a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory. Round interim calculations to the nearest dollar and the final answers to one decimal place. Assume 365 days a year.
Current Year Previous Year Sales $1,518,400 $1,589,900 Beginning inventories 72,972 98,606 Cost of goods sold 759,200 883,300 Ending inventories 65,972 72,972 Hito Caloutalo Imventory nalysis 2 Lx.13 11Algu the folloi"y data ,vere extracted rarn theincome staternentof breB Syster"s lm.: Previous Year Salas Reninnina inventoriss Cast of go sld Fnding inventanes a. Determinc for cach yoar(i) the inventory turnover and 2the number of days. sales in inventory. Round interm calculators tothe nearest dallarand the fnal answers to onc dcdmal place. Assume 365 dass 1,518,400 $1,589,900 . Ex.13-8.Algo 98,606 883,300 72,977 77,973 65,973 6. EX 15-0 ALGO Year. . LX15 GALGO . Inventory turnover 2. Number of days' seles in inventory b. The inventory position of the business has 8. Ex.15-3.Ago 0. EX15-21 ALGO 10. EX.14-15 ALGO 11. Pr.14-2.Algo days days ·The inventory turnover has while the number of days' sales in inventory has Prevlous Next Progress: 6r11 rtems ime Remaining: 1:52:15 Submit Test for Grading O Type here to searchExplanation / Answer
a.
Average inventory = (Beginning inventories + Ending inventories) / 2
Inventory turnover = Cost of goods sold / Average inventory
Number of day's sales in inventory = 365 / Inventory turnover
b.
The inventory position of the business has Improved. The inventory turnover has Increased, while the number of days' sales in inventory has Decreased.
Current year Previous year Beginning inventories 72,972 98,606 Ending inventories 65,972 72,972 Average inventory 69,472 85,789Related Questions
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