Brief Exercise 13-12 The following data were taken from the income statements of

Question

Brief Exercise 13-12 The following data were taken from the income statements of Sheridan Company. 2017 2016 S6,395,000 $6,236,000 851,400 4,826,000 4,602,000 1,182,000 954,600 Sales revenue Beginning inventory 954,600 Ending inventory 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 6.0 times 6.9 times LINK TO TEXT swer 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 61 days 53 days Click if you would like to Show Work for this question: how

Explanation / Answer

Cost of goods sold :

2017 = (954600+4826000+1182000) = 4598600

2016 = 851400+4602000-954600 = 4498800

Average inventory = 2017 = (954600+1182000/2) = 1068300

Average inventory 2016 = (954600+851400/2) = 903000

Inventory turnover = Cost of goods sold/average inventory

2017 = 4598600/1068300 = 4.3 Times

2016 = 4498800/903000 = 5.0 Times

Days in inventory = 365/inventory turnover

2017 = 365/4.3 = 85 days

2016 = 365/5 = 73 days

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