SHOW ALL WORK 6 The following data are available for Martin

SHOW ALL WORK!

6. The following data are available for Martin Solutions, Inc. Determine for each year: (a) Inventory Turnover and (b) the number of days\' sales in inventory (Round to one decimal place. Year 2 Year 1 Sales Beginning inventory Cost of goods sold Ending inventory $1,139,600 80,000 500,800 72,000 S1,192,320 64,000 606,000 80,000

Solution

Average inventory year 2 = (80000+72000/2) = 76000

Average inventory year 1 = (64000+80000/2) = 72000

	Year 2	Year 1
Inventory turnover	500800/76000 = 6.6 Times	606000/72000 = 8.4 Times
Number of days sales in inventory	365/6.6 = 55.3 days	365/8.4 = 43.5 days