Financial Accounting - Access
4th Edition
ISBN: 9781259958533
Author: SPICELAND
Publisher: MCG
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Chapter 6, Problem 6.16BE
To determine
To calculate: The inventory turnover ratio, average days in inventory and gross profit ratio.
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A7X Corporation has ending inventory of $701,073 and cost of goods sold for the year just ended was $7,461,613.
a.
What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.
What is the days’ sales in inventory? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.
How long on average did a unit of inventory sit on the shelf before it was sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
LM ltd has the following products in inventory at the year end.
Product Quantity Cost Selling price Selling cost
X 1,000 GHS40 GHS55 GHS8
Y 2,500 GHS15 GHS25 GHS4
Z 800 GHS23 GHS27 GHS5
At what amount should total inventory be stated in the statement of financial position?
The following information was available for Sheffield Corp. at December 31, 2022: beginning inventory $95000; ending inventory $76000; cost of goods sold $828000; and sales $1200000. Sheffield inventory turnover ratio in 2022 was
8.7 times.
14.0 times.
10.9 times.
9.7 times.
Chapter 6 Solutions
Financial Accounting - Access
Ch. 6 - 1.What is inventory? Where in the financial...Ch. 6 - Prob. 2RQCh. 6 - What is the difference among raw materials...Ch. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - What is a multiple-step income statement? What...Ch. 6 - Cheryl believes that companies report cost of...Ch. 6 - What are the three primary cost flow assumptions?...Ch. 6 - 9.Which cost flow assumption generally results in...Ch. 6 - Prob. 10RQ
Ch. 6 - Prob. 11RQCh. 6 - 12.Explain how LIFO generally results in lower...Ch. 6 - Prob. 13RQCh. 6 - Explain how freight charges, purchase returns, and...Ch. 6 - Explain the method of reporting inventory at lower...Ch. 6 - 16.How is cost of inventory determined? How is net...Ch. 6 - 17.Describe the entry to adjust from cost to net...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - How is gross profit calculated? What is the gross...Ch. 6 - 21.Explain how the sale of inventory on account is...Ch. 6 - Prob. 22RQCh. 6 - Prob. 23RQCh. 6 - Prob. 24RQCh. 6 - Understand terms related to types of companies...Ch. 6 - Prob. 6.2BECh. 6 - Calculate cost of goods sold (LO62) At the...Ch. 6 - Prob. 6.4BECh. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.8BECh. 6 - Identify financial statement effects of FIFO and...Ch. 6 - Prob. 6.10BECh. 6 - Record freight charges for inventory using a...Ch. 6 - Record purchase returns of inventory using a...Ch. 6 - Prob. 6.13BECh. 6 - Prob. 6.14BECh. 6 - Prob. 6.15BECh. 6 - Prob. 6.16BECh. 6 - Prob. 6.17BECh. 6 - Prob. 6.18BECh. 6 - Record purchase returns of inventory using a...Ch. 6 - Refer to the information in BE613, but now assume...Ch. 6 - Prob. 6.21BECh. 6 - Prob. 6.22BECh. 6 - Calculate cost of goods sold (LO62) Russell Retail...Ch. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Calculate inventory amounts when costs are rising...Ch. 6 - Calculate inventory amounts when costs are...Ch. 6 - Record Inventory transactions using o perpetual...Ch. 6 - Record inventory purchase and purchase return...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Record transactions using a perpetual system...Ch. 6 - Record transactions using a perpetual system...Ch. 6 - Calculate inventory using lower of cost and net...Ch. 6 - Prob. 6.14ECh. 6 - Calculate cost of goods sold, the inventory...Ch. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.18ECh. 6 - Record inventory purchases and sales using a...Ch. 6 - Mulligan Corporation purchases inventory on...Ch. 6 - Complete the accounting cycle using Inventory...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.2APCh. 6 - Prob. 6.3APCh. 6 - Prob. 6.4APCh. 6 - Calculate ending inventory end cost of goods sold...Ch. 6 - Record transactions using a perpetual system,...Ch. 6 - Prob. 6.7APCh. 6 - Prob. 6.8APCh. 6 - Record transactions and prepare a partial income...Ch. 6 - Prob. 6.10APCh. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.2BPCh. 6 - Prob. 6.3BPCh. 6 - Prob. 6.4BPCh. 6 - Prob. 6.5BPCh. 6 - Record transactions using a perpetual system,...Ch. 6 - Prob. 6.7BPCh. 6 - Use the inventory turnover retio end gross profit...Ch. 6 - Record transactions and prepare a partial income...Ch. 6 - Determine the effects of inventory errors using...Ch. 6 - Great Adventures (This is a continuation of the...Ch. 6 - Prob. 6.2APFACh. 6 - Prob. 6.3APFACh. 6 - Comparative Analysis American Eagle Outfitters,...Ch. 6 - Prob. 6.5APECh. 6 - Prob. 6.6APIRCh. 6 - Written Communication You have just been hired as...Ch. 6 - Prob. 6.8APEM
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- LO1 If the ending inventory is overstated by 10,000, indicate what, if anything, is incorrect about the following: Cost of goods sold___________ Gross profit___________ Net income___________ Ending owners capital___________arrow_forwardKulsrud Company would like to estimate the current inventory level. Using the gross profit method and the following information, estimate the current inventory level for Kulsrud Company. Goods available for sale 100,000 Net sales 150,000 Normal gross profit as a percent of sales 40%arrow_forwardInventory analysis Costco Wholesale Corporation (COST) and Wal-Mart Stores Inc. (WMT) compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected financial information for both companies from a recent year's financial statements (in millions): a. Determine for bom companies (1) the inventory turnover and (2) the days' sales in inventory. Round to one decimal place. b. Compare and interpret the inventory metrics computed in (a).arrow_forward
- Using the following data, how should the inventory be valued under lower of cost or market? Original cost 1,350 Estimated selling price 1,475 Selling expenses 180arrow_forwardLast year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?arrow_forwardTwenty metrics of liquidity, solvency, and profitability The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8 Instructions Inventory turnoverarrow_forward
- Using the following data, how should the inventory be valued under lower of cost or market? Original cost 1,350 Estimated selling price 1,475 Selling expenses 180arrow_forwardUsing the amounts below, calculate the inventory turnover ratio, average days in inventory, and gross profit ratio.Net sales $250,000 Cost of goods sold 180,000 Beginning inventory 55,000 Ending inventory 45,000arrow_forwardA7X corporation has ending inventory of $705273 and cost of goods sold for the year just ended was $8,135,165 a. What is the inventory turnover? Inventory turnover _______ times b. What is the days sales in inventory Days sales in inventory______ days c. How long on average did a unit of inventory sit on the shelf before it was sold? Days on shelf______ daysarrow_forward
- The cost of goods sold for Veltron International last year amounted to $547,800, and the average inventory at cost was $219,120. The published inventory turnover at cost is 6.6. Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory at cost (in $). (If the actual turnover is greater than the published rate, enter "above" for target average inventory.) Inventory turnover at cost Target average inventory at cost $arrow_forwardThe following data were obtained from the records of Salacot Company: Current ratio (at year end) 1.5 to 1 / Inventory turnover based on sales and ending inventory 15 times /Inventory turnover based on cost of goods sold and ending inventory 10 times /Gross margin for 2007 P360,000 What was Salacot Company’s December 31, 2007 balance in the Inventory account? * a. P72,000 b. P 54,000 c. P 80,000 d. P 95,000arrow_forwardQ1. As of December 321, 2021, Earth Mother’s Corporation physical inventory was $275,000, and its book inventory was $290,000. The effect of the inventory shrinkage on the accounts is: A. To increase Cost of Goods Sold and Inventory by $15,000 B. To increase Cost of Goods Sold and decrease Inventory by $15,000 C.To decrease Cost of Good Sold and increase Inventory by $15,000 D. To decrease Cost of Goods Sold and Inventory by $15,000arrow_forward
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