FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction. Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows: G r o s s P r o f i t % = G r o s s P r o f i t N e t S a l e s × 100 Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows: I n v e n t o r y t u r n o v e r = C o s t o f g o o d s s o l d A v e r a g e i n v e n t o r y Note: Average inventory is calculated as average of beginning and ending inventory for a period. Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows: D a y s S a l e s i n i n v e n t o r y = 365 I n v e n t o r y T u r n o v e r To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

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Answer 1

Question

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

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Answer 2

Question

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

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Answer 4

Question

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

Answer 6

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

Answer 7

Chapter 6, Problem 9CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Gross Profit percentage: Gross profit percentage is percentage of gross profit over net sales. It is a profitability ration to analyze the profitability. The formula to calculate the Gross Profit percentage is as follows:

$G r o s s P r o f i t % = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

Inventory Turnover: Inventory turnover ratio is efficiency ratio which indicates the efficiency to convert the inventory into sales. The formula to calculate the Inventory turnover is as follows:

$I n v e n t o r y t u r n o v e r = \frac{C o s t o f g o o d s s o l d}{A v e r a g e i n v e n t o r y}$

Note: Average inventory is calculated as average of beginning and ending inventory for a period.

Days sales in inventory: Days sales in inventory indicates the average time during which the inventory waits for sale. The formula to calculate the Days sales in inventory is as follows:

$D a y s S a l e s i n i n v e n t o r y = \frac{365}{I n v e n t o r y T u r n o v e r}$

To determine: The Gross Profit percentage, Inventory Turnover and Days sales in inventory

Answer 8

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Answer 9

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Answer 11

Ch. 6 - Which principle or concept states that business...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Which of the following is most closely linked to...Ch. 6 - At December 31, 2018, Stevenson Company overstated...Ch. 6 - Suppose Maestro’s had cost of goods sold during...Ch. 6 - Suppose used the LIFO inventory costing method and...Ch. 6 - Prob. 1RQ

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