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Inventory analysis The following data were extracted from the income statement of Keever Inc.: Current Year Previous Year Sales $18,500,000 $20,000,000 Beginning inventories 940,000 860,000 Cost of goods sold 9,270,000 10,800,000 Ending inventories 1,120,000 940,000 a. Determine for each year (1) the inventory turnover and (2) the number of days’ sales in inventory. Round to the nearest dollar and one decimal place. b. What conclusions can be drawn from these data concerning the inventories?

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 17, Problem 17.11EX
Textbook Problem

Inventory analysis

The following data were extracted from the income statement of Keever Inc.:

  Current Year Previous Year
Sales $18,500,000 $20,000,000
Beginning inventories 940,000 860,000
Cost of goods sold 9,270,000 10,800,000
Ending inventories 1,120,000 940,000

a. Determine for each year (1) the inventory turnover and (2) the number of days’ sales in inventory. Round to the nearest dollar and one decimal place.

b. What conclusions can be drawn from these data concerning the inventories?

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Chapter 17 Solutions

Accounting
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