Question

A company reports the following amounts for 2021 Help Inventory beginning) Inventory (ending) Purchases Purchase returns $20.000 31,000 220,000 13.00 Calculate cost of goods sold, the inventory turnover ratio, and the average days in inventory for 2021 (Use 365 days in a year. Round your intermediate and final answers to 1 decimal place.) Cost of goods sold Inventory turnover ratio Average days in inventory f u mes days

Answer 1

• Requirement #1

A	Inventory - Beginning	$20,000
B	Purchases	$220,000
C	Purchase returns	$13,000
D = A+B - C	Cost of Goods available for sale	$227,000
E	Inventory - Ending	$31,000
F = D - E	Cost of Goods Sold	$196,000	Answer
G = (A+E) / 2	Average Inventory	$25,500
H = F/G	Inventory Turnover ratio	7.7	Answer
I = 365 / H	Average days in inventory	47.4	Answer

• Requirement #2

>Ending Inventory units = 413 units – 330 units = 83 units

>Ending Inventory = 83 units x $ 72 (Nov 3 rate) = $ 5976 Answer
>Cost of Goods Sold = $ 29200 – 5976 ending inventory = $ 23,224 Answer