2. The following information is available for Manning Company: Beginning inventory $ 120,000 Cost of goods sold 550,000 Ending inventory 140,000 Sales 750,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory (c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS Inventory Turnover Days in Inventory EXTRA CREDIT In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to the current cost of the inventory. Breland Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profits? Crawford Company - B/S Inventory @ current cost- Breland Company - B/S Inventory below current cost-
2. The following information is available for Manning Company: Beginning inventory $ 120,000 Cost of goods sold 550,000 Ending inventory 140,000 Sales 750,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory (c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS Inventory Turnover Days in Inventory EXTRA CREDIT In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to the current cost of the inventory. Breland Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profits? Crawford Company - B/S Inventory @ current cost- Breland Company - B/S Inventory below current cost-
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. The following information is available for Manning Company:
Beginning inventory
$ 120,000
Cost of goods sold
550,000
Ending inventory
140,000
Sales
750,000
Instructions
Compute each of the following:
(a) Inventory turnover.
(b) Days in inventory
(c) EXPLAIN WHAT THESE RATIOS MEAN IN WORDS
Inventory Turnover
Days in Inventory
EXTRA CREDIT
In a period of rising prices, the inventory reported in Crawford Company's balance sheet is close to
the current cost of the inventory. Breland Company's inventory is considerably below its current cost.
Identify the inventory cost flow method being used by each company. Which company has probably
been reporting the higher gross profits?
Crawford Company - B/S Inventory @ current cost-
Breland Company - B/S Inventory below current cost-
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