Required: 1. Compute the inventory turnover ratio based on two different assumptions: Note: Round your answers to 1 decimal place. a. Those presented in the above table (a decrease in the balance in inventory). b. No change from the beginning-of-the-year inventory balance.
Required: 1. Compute the inventory turnover ratio based on two different assumptions: Note: Round your answers to 1 decimal place. a. Those presented in the above table (a decrease in the balance in inventory). b. No change from the beginning-of-the-year inventory balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![[The following information applies to the questions displayed below.]
Mears and Company has been operating for five years as an electronics component manufacturer specializing in cellular
phone components. During this period, it has experienced rapid growth in sales revenue and in inventory. Mr. Mears and
his associates have hired you as Mears's first corporate controller. You have put into place new purchasing and
manufacturing procedures that are expected to reduce inventories by approximately one-third by year-end. You have
gathered the following data related to the changes:
Inventory
(dollars in thousands)
Beginning
of Year
$585,700
End of Year
(projected)
$392,310
Current Year
Cost of goods sold
P7-7 Part 1
(projected)
$7,018,984
Required:
1. Compute the inventory turnover ratio based on two different assumptions:
Note: Round your answers to 1 decimal place.
a. Those presented in the above table (a decrease in the balance in inventory).
b. No change from the beginning-of-the-year inventory balance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd4d3c4f8-b72b-49a0-ae1a-9dc679393271%2Fde895312-8a7c-429d-9b8e-41fe3260ced6%2Fp9salg_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Mears and Company has been operating for five years as an electronics component manufacturer specializing in cellular
phone components. During this period, it has experienced rapid growth in sales revenue and in inventory. Mr. Mears and
his associates have hired you as Mears's first corporate controller. You have put into place new purchasing and
manufacturing procedures that are expected to reduce inventories by approximately one-third by year-end. You have
gathered the following data related to the changes:
Inventory
(dollars in thousands)
Beginning
of Year
$585,700
End of Year
(projected)
$392,310
Current Year
Cost of goods sold
P7-7 Part 1
(projected)
$7,018,984
Required:
1. Compute the inventory turnover ratio based on two different assumptions:
Note: Round your answers to 1 decimal place.
a. Those presented in the above table (a decrease in the balance in inventory).
b. No change from the beginning-of-the-year inventory balance.
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