Inventory Turnover and Days' Sales in Inventory Financial statement data for years ending December 31 for Holland Company follows:   20Y4 20Y3 Cost of merchandise sold $4,504,500     $3,715,200     Inventories:               Beginning of year 788,000     760,000       End of year 850,000       788,000     a.  Determine the inventory turnover for 20Y4 and 20Y3. Round to one decimal place.   Inventory Turnover 20Y4   20Y3     b.  Determine the days' sales in inventory for 20Y4 and 20Y3. Assume 365 days a year. Round interim calculations and final answers to one decimal place.   Days' Sales in Inventory 20Y4 days 20Y3 days c.  Does the change in inventory turnover and the days' sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?Unfavorable

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is