Chapter 6, Problem 3AP

1.

To determine

Ascertain the amounts of inventory reported in the balance sheet for the most recent year and also describe the amount it represents.

2.

To determine

Identify the manner in which the cost of goods sold is referred by Incorporation B.

3.

To determine

Ascertain the amount of cost of goods sold reported in the income statement for the most recent year and also define the amount it represents.

4.

To determine

Calculate the inventory turnover ratio and the average days in inventory for the most recent year of Incorporation B.

5.

To determine

Calculate the gross profit ratio of Incorporation B for each of the three years, and identify the trend if any.

6.

To determine

Calculate Incorporation B’s ratio of operating expenses to net sales.