The following data were extracted from the income statement of Brecca Systems Inc.: Current Year Preceding Year Sales $9,700,000 $7,175,000 Beginning inventories 420,000 400,000 Cost of goods sold 5,820,000 4,305,000 Ending inventories 550,000 420,000 a. (1). Determine for each year the inventory turnover. Round answers to one decimal place. Current year fill in the blank 1 Preceding year fill in the blank 2 (2). Determine for each year the days' sales in inventory. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Current year fill in the blank 3 days Preceding year fill in the blank 4 days b. What conclusions can be drawn from these data concerning the inventories?
The following data were extracted from the income statement of Brecca Systems Inc.: Current Year Preceding Year Sales $9,700,000 $7,175,000 Beginning inventories 420,000 400,000 Cost of goods sold 5,820,000 4,305,000 Ending inventories 550,000 420,000 a. (1). Determine for each year the inventory turnover. Round answers to one decimal place. Current year fill in the blank 1 Preceding year fill in the blank 2 (2). Determine for each year the days' sales in inventory. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Current year fill in the blank 3 days Preceding year fill in the blank 4 days b. What conclusions can be drawn from these data concerning the inventories?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Inventory Analysis
The following data were extracted from the income statement of Brecca Systems Inc.:
| Current Year | Preceding Year | |||
| Sales | $9,700,000 | $7,175,000 | ||
| Beginning inventories | 420,000 | 400,000 | ||
| Cost of goods sold | 5,820,000 | 4,305,000 | ||
| Ending inventories | 550,000 | 420,000 |
a. (1). Determine for each year the inventory turnover. Round answers to one decimal place.
| Current year | fill in the blank 1 |
| Preceding year | fill in the blank 2 |
(2). Determine for each year the days' sales in inventory. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place.
| Current year | fill in the blank 3 days |
| Preceding year | fill in the blank 4 days |
b. What conclusions can be drawn from these data concerning the inventories?
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