Inventory Analysis The following data were extracted from the income statement o

Question

Inventory Analysis The following data were extracted from the income statement of Brecca Systems Inc. Current Year Previous Year Sales Beginning inventories Cost of goods sold Ending inventories a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory. Round interim calculations to the nearest dollar and the final answers to one decimal place. Assume 365 days a year, $1,143,200 57,118 635,100 68,400 $1,095,000 68,400 547,500 61,800 Current Yea Previous Year 1. Inventory turnover 2. Number of days' sales in inventory b. The inventory position of the business has sales in inventory has days days . The inventory turnover has ,while the number of days

Explanation / Answer

Calculate following :

b) The inventory position of the bussiness has decrease..the inventory turnover had decrease and while number of days sales in inventory has increased...

Current year Previous year Cost of goods sold 547500 635100 Average inventory 65100 62759 Inventory turnover 547500/65100=8.4 635100/62759=10.1 Number of days's sales in inventory 365/8.4=43.5 days 365/10.1 = 36.1 days

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