Question

Connolly - Outlo Course: BU-1152-05 Financial My Home CengageNOWV2 Online teachi.. Cengage Learning Dyeislife Hoodie eBook Show Me How Calculator Print Item Inventory Analysis The following data were extracted from the income statement of Shriver Inc.: Current Year Prior Year Sales $17,900,000 $18,100,000 Beginning inventories 760,000 700,000 Cost of merchandise sold 8,964,000 9,782,000 Ending Inventories 900,000 760,000 a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in Inventory. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume 365 days a year. Current Year Prior Year 1. Inventory turnover 2. Number of days' sales in inventory days days b. The inventory position of the business has deterioratedThe invertory turnover has decreased while the number of days' sales in inventory has Increased The sales volume has declined faster than the inventory, resulting in a deteriorating inventory position. Feedback Check My Work a. 1. Divide the cost of goods sold by the average inventory. Average inventory (Beginning inventory + Ending inventory) - 2. 2.2. Divide the average inventory by the average daily cost of goods sold. Average Inventory - (Beginning inventory Ending Inventory) - 2. Average daily cost of goods sold cost of goods. 365 days b. Consider the relationship of the accounts involved. Previous Next Check My Work

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Shriver
Available data	Current	Prior	Previous
Cost of merchandise sold	8,964,000.00	9,782,000.00
Inventory	900,000.00	760,000.00	700,000.00
Average Inventory	830,000.00	730,000.00
Final Answer	Current	Prior
Inventory Turnover
Cost of merchandise sold/ Inventory	10.80	13.40
Number of days in inventory
365/ Inventory Turnover	33.80	27.24