(L. OBJ. 5) Preparing a multi-step income statement [10—15 min] Review the data in Exer...

(L. OBJ. 5) Preparing a multi-step income statement [10—15 min]

Review the data in Exercise 5-21.

Requirements

1. Compute the rate of inventory turnover for the fiscal year ended January 31, 2011 assuming $22,000 in average inventory.

2. The inventory turnover rare for the fiscal year ending January 31, 2010 was 3.8 times. Did the inventory turnover rate improve or deteriorate from 2010 to 2011?