Brief Exercise 1812 Part Level Submission The following data

Brief Exercise 18-12 (Part Level Submission) The following data are from the income statements of Haskin Company. 2017 2016 Sales revenue 6,350,000 $6,290,000 845,000 4,660,000 910,000 Beginning inventory 910,000 4,380,000 1,020,000 Ending inventory (al) Compute for each year the inventory turnover. (Round answers to 1 decimal place, e.g. 1.6.) 2017 2016 Inventory turmover

Solution

Answer:

Inventory Turnover = Cost of goods sold / Average Inventory

Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory

       2017            = 910000 + 4380000 - 1020000 = 4270000

Average Inventory   = (Beginning Inventory + Ending Inventory)/2 = ( 910000 + 1020000)/2 = 965000

Inventory Turnover = 4270000 / 965000 = 4.42 times

Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory

       2016            = 845000 + 4660000 - 910000 = 4595000

Average Inventory   = (Beginning Inventory + Ending Inventory)/2 = ( 845000 + 910000)/2 = 877500

Inventory Turnover = 4595000 / 877500 = 5.24 times