Financial statement data for years ending December 31 for Holland Company follow:20Υ420Υ3Cost of merchandise sold$4,504,500$3,715,200Inventories:Beginning of yearEnd of year788,000760,000850,000788,000a. Determine the inventory turnover for 20Y4 and 20Y3.b. Determine the days' sales in inventory for 20Y4 and 20Y3. Use 365 days and roundto one decimal place.c. Does the change in inventory turnover and the days' sales in inventory from 20Y3 to20Y4 indicate a favorable or an unfavorable trend?

(a)Determine inventory turnover for 20Y4 and 20Y3.

Answered: Financial statement data for years…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Inventory turnover and 'number of days' sales in inventory Financial statement data for years ending December 31 for Tango Company follow: 20Y7 20Υ6 Cost of goods sold $3,739,790 $3,852,940 Inventories: Beginning of year 759,200 722,700 End of year 832,200 759,200 Required a. Determine the inventory turnover for 20Y7 and 20Y6. Round to one decimal place. 20Υ7 20Y6 Inventory turnover b. Determine the number of days' sales in inventory for 20Y7 and 20Y6. Use 365 days and round to one decimal place. 20Υ7 20Y6 Number of days' sales in inventory days days c. Are the changes in inventory turnover and the number of days' sales in inventory from 20Y6 to 20Y7 favorable or unfavorable?
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