SCC Co. reported the following for the current year: net sales of $48,000; cost of goods sold of $40,000; beginning balance in inventory of $2,000; and ending balance in inventory of $8,000. Compute (a) inventory turnover and (b) days’ sales in inventory. Hint: Recall that inventory turnover uses average inventory and days’ sales in inventory uses the ending balance in inventory.
SCC Co. reported the following for the current year: net sales of $48,000; cost of goods sold of $40,000; beginning balance in inventory of $2,000; and ending balance in inventory of $8,000. Compute (a) inventory turnover and (b) days’ sales in inventory. Hint: Recall that inventory turnover uses average inventory and days’ sales in inventory uses the ending balance in inventory.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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SCC Co. reported the following for the current year: net sales of $48,000; cost of goods sold of $40,000;
beginning balance in inventory of $2,000; and ending balance in inventory of $8,000. Compute (a) inventory
turnover and (b) days’ sales in inventory. Hint: Recall that inventory turnover uses average inventory
and days’ sales in inventory uses the ending balance in inventory.
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