Question

CALCULATOR PRINTER VERSION BACK NE Exercise 6-12 The following information is available for Blue Spruce Corp. for three recent fiscal years. 2017 2016 2015 Inventory $545,441 $570,212 $333,435 Net sales 1,953,922 1,736,880 1,290,976 Cost of goods sold 1,564,507 1,305,5339 44,111 Calculate the inventory turnover, days In Inventory, and gross profit rate for 2017 and 2016. (Round invento places, 125 and gross profit rate to I decimal place, .. 5.29.) o 1 decimal place, e.g. 5.2, days in Inventory to o decimal 2017 Inventory Turnover Days in Inventory Gross Pront Rate Click if you would like to show Work for this questions Open Show Work

Answer 1

Answer- Inventory turnover ratio = Cost of goods sold/Average inventory

2017 = $1564507/($570212+$545441)/2

= $1564507/$557826.5

= 2.8 times

2016 = $1305533/($333435+$570212)/2

= $1305533/$451823.5

= 2.9 times

Days in inventory =365 days/ Inventory turnover ratio

2017 = 365 days/2.8 times =130 days

2016 = 365 days/2.9 times = 126 days

Gross profit rate = (Gross profit/Sales revenue)*100

Where – Gross profit = Sales revenue- Cost of goods sold

2017 = {($1953922-$1564507)/$1953922}*100

= ($389415/$1953922)*100

= 19.9%

2016 = {($1736880-$1305533)/$1736880}*100

= ($431347/$1736880)*100

= 24.8%