Inventory Analysis The following data were extracted from th

Inventory Analysis The following data were extracted from the income statement of Keever Inc.: Previous Year $867,200 39,632 481,800 46,660 Current Year Sales Beginning inventories Cost of goods solod 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. $832,200 46,660 416,100 42,260 Current Year Previous Year 1. Inventory turnover 2. Number of days\' sales in inventory b. The inventory position of the business has days days The inventory turnover has while the number of days\' sales in inventory has

Solution

Current year Previous Year 1 Inventory Turn over                                             9.36                                        11.17 2 Number of day\'s Sales Inventory                                           39.00                                        32.69 Days b The inventory position of business has Week. The inventory turn over has Decreasing while the number of days sales in inventory has increasing Inventory Turn over Cost of goods sold / Average inventory 416100/(46660+42260)/2   481800/(39632+46660)/2 Number of day\'s Sales Inventory 365 / Inventory Turn over 365 / 9.36 365 / 11.17