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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: Cost of goods sold Inventories: Beginning of year End of year Required 20Y7 $3,864,000 770,000 840,000 20Y6 $4,001,500 20Y7 740,000 770,000 a. Determine the inventory turnover for 2017 and 20Y6. Round to one decimal place. 20Y6 Inventory turnover

Inventory turnover and number of days' sales in inventory Financial statement data for years ending December 31 for Tango Company follow: Cost of goods sold Inventories: Beginning of year End of year Required 20Y7 $3,864,000 770,000 840,000 20Y6 $4,001,500 20Y7 740,000 770,000 a. Determine the inventory turnover for 2017 and 20Y6. Round to one decimal place. 20Y6 Inventory turnover

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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< eBook Inventory turnover and number of days' sales in inventory Financial statement data for years ending December 31 for Tango Company follow: Cost of goods sold Inventories: Beginning of year End of year Required Show Me How Unfavorable 20Y7 $3,864,000 Feedback 770,000 840,000 a. Determine the inventory turnover for 20Y7 and 20Y6. Round to one decimal place. 20Y6 $4,001,500 20Y7 Check My Work 740,000 770,000 Inventory turnover b. Determine the number of days' sales in inventory for 20Y7 and 20Y6. Use 365 days and round to one decimal place. 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? 20Y7 20Y6 Check My Work a. The inventory turnover ratio indicates how many times a company has sold and replaced inventory during a period. The inventory turnover ratio is calculated by dividing the cost of goods sold for a period by period. b. Number of days' sales in inventory indicates the average time required for a company to convert its inventory into sales. The calculation of the number of days' sales in inventory is the average inventory for th average daily cost of goods sold. c. A high ratio implies either strong sales or large discounts. All work saved. Email Instructor Save and Exit
Transcribed Image Text:< eBook Inventory turnover and number of days' sales in inventory Financial statement data for years ending December 31 for Tango Company follow: Cost of goods sold Inventories: Beginning of year End of year Required Show Me How Unfavorable 20Y7 $3,864,000 Feedback 770,000 840,000 a. Determine the inventory turnover for 20Y7 and 20Y6. Round to one decimal place. 20Y6 $4,001,500 20Y7 Check My Work 740,000 770,000 Inventory turnover b. Determine the number of days' sales in inventory for 20Y7 and 20Y6. Use 365 days and round to one decimal place. 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? 20Y7 20Y6 Check My Work a. The inventory turnover ratio indicates how many times a company has sold and replaced inventory during a period. The inventory turnover ratio is calculated by dividing the cost of goods sold for a period by period. b. Number of days' sales in inventory indicates the average time required for a company to convert its inventory into sales. The calculation of the number of days' sales in inventory is the average inventory for th average daily cost of goods sold. c. A high ratio implies either strong sales or large discounts. All work saved. Email Instructor Save and Exit
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