Use the following information relating to Clover Company to calculate (a) the inventory turnover ratio, (b) gross margin, and (c) the number of days’ sales in inventory ratio, for years 2022 and 2023. Assume a year has 365 days. Do not round intermediate calculations and round your final answers to 3 decimal places. SalesCost ofGoods SoldAverageInventoryYear 2021$250,000$187,500 $26,000 Year 2022295,000221,250 30,000 Year 2023323,000252,250 35,000 InventoryTurnoverGrossMarginDays' Salesin InventoryYear 2022fill in the blank 1$fill in the blank 2fill in the blank 3Year 2023fill in the blank 4$fill in the blank 5fill in the blank 6

Inventory turnover = Cost of goods sold / Average inventory where, Average inventory = (Beginning inventory + Ending inventory) / 2 Days sales in Inventory = 365 / Inventory turnover Gross margin = Sales - cost of goods sold a. Cost ofGoods Sold AverageInventory Inventory turnover = Cost of goods sold / Average inventory Year 2022 221,250 30,000 7.375 Year 2023 252,250 35,000 7.207 b. Sales Cost ofGoods Sold Gross margin Year 2022 295,000 221,250 $73,750 Year 2023 323,000 252,250 $70,750c. Days in a year Inventory turnover Days' Salesin Inventory Year 2022 365 7.375 49.492 days Year 2023 365 7.207 50.645 days

Answered: Use the following information relating…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following information relating to Clover Company to calculate (a) the inventory turnover ratio, (b) gross margin, and (c) the number of days’ sales in inventory ratio, for years 2022 and 2023. Assume a year has 365 days. Do not round intermediate calculations and round your final answers to 3 decimal places.

	Sales	Cost of Goods Sold	Average Inventory
Year 2021	$250,000	$187,500	$26,000
Year 2022	295,000	221,250	30,000
Year 2023	323,000	252,250	35,000

	Inventory Turnover	Gross Margin	Days' Sales in Inventory
Year 2022	fill in the blank 1	$fill in the blank 2	fill in the blank 3
Year 2023	fill in the blank 4	$fill in the blank 5	fill in the blank 6

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