Financial statement data for years ending December 31 for Tango Company follow:   20Y7 20Y6 Cost of goods sold $3,791,255 $4,079,970 Inventories:       Beginning of year 773,800 737,300   End of year 839,500 773,800 Required a. Determine the inventory turnover for 20Y7 and 20Y6. Round to one decimal place.   20Y7 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.   20Y7 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?

Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 8PEB: Financial statement data for years ending December 31 for Tango Company follow: a. Determine the...
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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 20Y6
Cost of goods sold $3,791,255 $4,079,970
Inventories:    
  Beginning of year 773,800 737,300
  End of year 839,500 773,800

Required

a. Determine the inventory turnover for 20Y7 and 20Y6. Round to one decimal place.

  20Y7 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.

  20Y7 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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