HBläckboard LearnXEasy Access to Internet ServicesCCsu.blackboard.com/webapps/blackboard/content/contentWrapperjsp?course_id=_43047 1&disp- CCentral Connecticut State UniversityMcGraw-Hill CONNECT SEC 09GameWorld Corp. is the world's largest multichannel video game retailer. The company reported thefollowing amounts in its financial statements (in millions).2012$10,400 $ 9,9006,4402013Net Sales RevenueCost of Goods Sold6,8401,9501,250Beginning InventoryEnding Inventory2,3501,950Required:1. Determine the inventory turnover ratio and average days to sell inventory for 2013 and 2012 (Use 365days in a year. Round your intermediate and final answers to 1 decimal place.)TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory).20132012|Inventory TurnoverRatiotimes per yeartimes per yearDays to Selldaysdays2. Is GameWorld performing better than its competitor Ultimate Value where inventory turned over 3.6times during 2013 (65 days to sell).OYese

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Asked Oct 13, 2019
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Question 1

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Central Connecticut State University
McGraw-Hill CONNECT SEC 09
GameWorld Corp. is the world's largest multichannel video game retailer. The company reported the
following amounts in its financial statements (in millions).
2012
$10,400 $ 9,900
6,440
2013
Net Sales Revenue
Cost of Goods Sold
6,840
1,950
1,250
Beginning Inventory
Ending Inventory
2,350
1,950
Required:
1. Determine the inventory turnover ratio and average days to sell inventory for 2013 and 2012 (Use 365
days in a year. Round your intermediate and final answers to 1 decimal place.)
TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory).
2013
2012
|Inventory Turnover
Ratio
times per year
times per year
Days to Sell
days
days
2. Is GameWorld performing better than its competitor Ultimate Value where inventory turned over 3.6
times during 2013 (65 days to sell).
OYes
e
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HBläckboard Learn X Easy Access to Internet Services CCsu.blackboard.com/webapps/blackboard/content/contentWrapperjsp?course_id=_43047 1&disp - C Central Connecticut State University McGraw-Hill CONNECT SEC 09 GameWorld Corp. is the world's largest multichannel video game retailer. The company reported the following amounts in its financial statements (in millions). 2012 $10,400 $ 9,900 6,440 2013 Net Sales Revenue Cost of Goods Sold 6,840 1,950 1,250 Beginning Inventory Ending Inventory 2,350 1,950 Required: 1. Determine the inventory turnover ratio and average days to sell inventory for 2013 and 2012 (Use 365 days in a year. Round your intermediate and final answers to 1 decimal place.) TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory). 2013 2012 |Inventory Turnover Ratio times per year times per year Days to Sell days days 2. Is GameWorld performing better than its competitor Ultimate Value where inventory turned over 3.6 times during 2013 (65 days to sell). OYes e

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Expert Answer

Step 1

Inventory

Inventory refers to the Work-in-progress, raw material or the finished goods that are assumed to the part of the assets of the business that would be ready or are already ready to be sold. The turnover of the inventory is one of the important source of profit generation for the owners or shareholders of the company.

Step 2
  1. Inventory Turnover Ratio refers to the ratio that depicts the number of times the inventory of the company can be replaced or sold in a particular period of time. A high inventory turnover ratio represents ineffective buying or strong sales and low turnover ratio represents poor sales.

Therefore, Computation of inventory turnover ratio for the year 2013 and 2012 is shown below:

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Computation of inventory turnover ratio for the year 2013 and 2012 For 2013. Given, Beginning Inventory $1,950 Ending Inventory = $2,350 COGS $6,840 Cost of Goods Sold Inventory Turnover Ratio for 2013 | Average Inventory $6,840 $1,950+$2,350 2 $6,840 $3,125 2.188 times

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Step 3

For 2012,

 

Given,   Beginning Inventory = $1,250

              Ending Inventory...

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Cost of Goods Sold Inventory Turnover Ratio for 2012 =| Average Inventory $6,440 $1,250+S1,950 2 $6,840 $2, 225 =3.074 times Hence, it is ascertained that the inventory turnover ratio for the year 2013 account for 2.188 times And for the year 2012 it accounts for 3.074 times

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