The following data were taken from the income statements of Wildhorse Co.. 2017

Question

The following data were taken from the income statements of Wildhorse Co.. 2017 2016 Sales revenue Beginning inventory Purchases Ending inventory $6,553,000 969,500 4,814,000 1,178,000 $6,296,000 842,800 4,679,000 969,500 Your answer is incorrect. Try again Compute the inventory turnover for each year. (Round answers to 1 decimal place, e.g. 12.5.) 2017 2016 Inventory turnover 2.9 times 3.4 times LINK TO TEXT INTERACTIVE TUTORIAL X Your answer is incorrect. Try again Compute days in inventory for each year. (Round answers to 0 decimal places, e.g. 124. Use 365 days for calculation.) 2017 2016 Days in inventory 122 days 107 days

Explanation / Answer

2017 2016 Sales 6,533,000 6,296,000 Beginning Inventory 969,500 842,800 Purchases 4,814,000 4,679,000 Ending Inventory 1,178,000 969,500 Cost of goods sold= Beginning inventory+purchases-Ending Inventory 4,605,500 4,552,300 Average Inventory=(Beginning Inventory+Ending Inventory)/2 1,073,750 906,150 Inventory Turnover rattio= Cost of goods sold/average Inventory 4.29 5.02 Days in Inventory= No of days in year/ Inventory Turnover Ratio Days in Inventory 365/4.289 366/5.023 Days in Inventory 85.10 72.85

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