Question

Exercise 6-12 a x Your answer is incorrect. Try again. The following information is available for Shamrock, Inc. for three recent fiscal years. Inventory Net sales Cost of goods sold 2022 $565,000 1,980,000 1,257,300 2021 $578,000 1,775,000 1,061,450 2020 $345,000 1,345,000 941,000 (a) Calculate the inventory turnover, days in inventory, and gross profit rate for 2022 and 2021. (Round inventory turnover to 1 decimal place, e.g. 5.2, days in inventory to o decimal places, e.g. 125 and gross profit rate to 1 decimal place, e.g. 5.2%) 2022 2021 Inventory Turnover 3.5 times T 3.1 times Days in Inventory days T 118 days Gross Profit Rate Click If you would like to Show Work for this question: Open Show Work

Answer 1

Inventory Turnover = Cost of Goods Sold/Average inventory

Days in inventory = 365/Inventory Turnover

Gross profit rate = Gross Profit/Sales

	2022	2021
Inventory Turnover	= 1,257,300/[(565,000+578,000)/2] = 2.2	= 1,061,450/[(578,000+345,000)/2 = 2.3
Days in inventory	= 365/2.2 = 165	= 365/2.3 = 158
Gross profit rate	36.5%	40.2%