Question

34) Anderson Farms Company provided the following for 2018: Cost of Goods Sold (Cost of sales)__ Beginning Merchandise Inventory Ending Merchandise Inventory $1,200,000 300,000 640,000 Calculate the company's inventory tumover ratio for the year. (Round your answer to two decimal places.) O A) 2.55 times per year B) 1.28 times per year C) 4.00 times per year D) 1.88 times per year 35) A lower days' sales in inventory for Samson Company, when compared to other companies, indicates that it is A) holding excess obsolete inventory B) selling its inventory more quickly C) incurring higher insurance costs D) spending more on inventory storage 36) Which of the following is the correct formula to calculate day's' sales in inventory? A) Days' sales in inventory = 365 days. Inventory turnover B) Days' sales in inventory - 365 days * Inventory tumover C) Days' sales in inventory - 365 days / Inventory turnover D) Days' sales in inventory - 365 days - Inventory turnover 37) Kelley Company provided the following account balances for 2018 Cost of Goods Sold (Cost of sales) Beginning Merchandise Inventory Ending Merchandise Inventory $1,300,000 340.000 350,000 Calculate the average number of days that inventory was held by Kelley Company during 2015 Page 5 of 8 2465 words English (United States) Focus mi u le an a ENG

Answer 1

34
a	Cost of goods sold	$12,00,000
b	Average Inventory[($300,000+$640,000)/2]	$4,70,000
	Inventory Turnover ratio(a/b)	2.55	times
	So Option A is answer
35	A lower day's sales in inventory as compared to its competitors shall indicate that the
	Samson company is able to sell its inventory more quickly thereby converting its
	inventory into cash more quickly
	So Option B is answer
36	Days sales in inventory =365 days / Inventory Turnover ratio
	So Option C is answer
37
a	Cost of goods sold	$13,00,000
b	Average Inventory[($340,000+$350,000)/2]	$3,45,000
	Inventory Turnover ratio(a/b)	3.77	times
	Days sales in inventory(365 days / 3.77)	97	days