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2. The following information is available for Manning Company: Beginning inventory $ 120,000 Cost of goods sold 550,000 Ending inventory 140,000 Sales 750,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory (c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS Inventory Turnover Days in Inventory EXTRA CREDIT In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to the current cost of the inventory. Breland Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profits? Crawford Company - B/S Inventory @ current cost- Breland Company - B/S Inventory below current cost-

2. The following information is available for Manning Company: Beginning inventory $ 120,000 Cost of goods sold 550,000 Ending inventory 140,000 Sales 750,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory (c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS Inventory Turnover Days in Inventory EXTRA CREDIT In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to the current cost of the inventory. Breland Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profits? Crawford Company - B/S Inventory @ current cost- Breland Company - B/S Inventory below current cost-

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 58E: Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following...
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2. The following information is available for Manning Company: Beginning inventory $ 120,000 Cost of goods sold 550,000 Ending inventory 140,000 Sales 750,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory (c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS Inventory Turnover Days in Inventory EXTRA CREDIT In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to the current cost of the inventory. Breland Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profits? Crawford Company - B/S Inventory @ current cost- Breland Company - B/S Inventory below current cost-
Transcribed Image Text:2. The following information is available for Manning Company: Beginning inventory $ 120,000 Cost of goods sold 550,000 Ending inventory 140,000 Sales 750,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory (c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS Inventory Turnover Days in Inventory EXTRA CREDIT In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to the current cost of the inventory. Breland Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profits? Crawford Company - B/S Inventory @ current cost- Breland Company - B/S Inventory below current cost-
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