Question

questions 24-25 Use the following to answer Moon Beam, Inc. has the following income statement (in millions): MOON BEAM, INC. Income Statement For the Year Ended December 31, 2016 $180 120 60 33 $ 27 Net Sales Cost of Goods Sold Gross Profit Operating Expenses Net Income 24. Using vertical analysis, what percentage is assigned to Cost of Goods Sold? A) 67% B) 33% C) 100% D) None of the above tio fr2016 is 25. Using vertical analysis, what percentage is assigned to Net Income? A) 100% B) 85% C) 15% D) None of the above following on itsnco statomen SC0,000 120.000 5300 000 Use the following to answer questions 26-27: Waters Department Store had net credit sales of $12,000,000 and cost of goods sold of $9,000,000 for the year. The average inventory for the year amounted to $2,000,000. 26. Inventory turnover for the year is A) 6 times B) 10.5 times C) 4.5 times tD) 3 times qea 27. The average number of days in inventory during the year was A) 122 days B) 81 days C) 61 days D) 35 days poatle con the noust &fRi Cony he bowing tra

Answer 1

sales cost of goods so;d gross profit operating expenses net income 24) answer : A) 67% explanation percentage assigned to cost of goods sold=120/180*100 67% 25) answer: C) 15% explanation percentage assigned to net income=27/180*100 15%

credit sales cost of goods sold average inventory 1,20,00,000 90,00,000 20,00,000 26) answer :C) 4.5 times explanation inventory turnover =cost of goods sold/avg inventory 4.5 times 27) answer: B) 81 days explanation average days in inventory= average inventory/cost of goods sold*365 81 days