Videos
Requirement 1:
To find:
Products manufactured by Apple.
Concept Introduction:
Gross Margin Ratio:
Gross margin ratio is the amount of gross margin expressed in percentage compared with the net sales of the business.
Inventory Turnover Ratio:
The financial ratio which shows the level of efficiency of a company in managing their inventory is termed as inventory turnover ratio. It is computed by dividing the cost of goods sold by the average inventory held by the company.
Days' Sales in Inventory:
The ratio which measures the amount of time taken by a company to sell its inventory. Days' sales in inventory are computed by dividing the number of days in a year by the inventory turnover ratio of the business.
Requirement 2:
To find the method:
What is the inventory method use by Apple?
Concept Introduction:
Gross Margin Ratio:
Gross margin ratio is the amount of gross margin expressed in percentage compared with the net sales of the business.
Inventory Turnover Ratio:
The financial ratio which shows the level of efficiency of a company in managing their inventory is termed as inventory turnover ratio. It is computed by dividing the cost of goods sold by the average inventory held by the company.
Days' Sales in Inventory:
The ratio which measures the amount of time taken by a company to sell its inventory. Days' sales in inventory are computed by dividing the number of days in a year by the inventory turnover ratio of the business.
Requirement 3:
To Compute:
Compute its gross margin and gross margin ratio for the fiscal year 2017. Comment on your computation
Concept Introduction:
Gross Margin Ratio:
Gross margin ratio is the amount of gross margin expressed in percentage compared with the net sales of the business.
Inventory Turnover Ratio:
The financial ratio which shows the level of efficiency of a company in managing their inventory is termed as inventory turnover ratio. It is computed by dividing the cost of goods sold by the average inventory held by the company.
Days' Sales in Inventory:
The ratio which measures the amount of time taken by a company to sell its inventory. Days' sales in inventory are computed by dividing the number of days in a year by the inventory turnover ratio of the business.
Requirement 4:
To compute:
Compute the inventory turnover and days' sales in inventory for the year ended September 30, 2017. Comment on your computations
Want to see the full answer?
Check out a sample textbook solution
Chapter 6 Solutions
FUNDAMENTAL ACCT PRINCIPLES LL W CONNECT
- Solve with explanation and accounting questionarrow_forwardBoston Supplies had cash sales of $78,450, credit sales of $45,670, sale returns and allowances of $6,890, and sales discounts of $3,750. What is the company's net sales for this period?arrow_forwardWhat is the company's net sales for this period?arrow_forward
- What is the primary purpose of preparing a trial balance? a) To calculate net profit or lossb) To check the mathematical accuracy of the ledger accountsc) To prepare the income statementd) To report cash flowsarrow_forwardMachinery was purchased for $78,500 on January 1, 2018. Shipping costs were $2,200 and installation expenses totaled $4,300. It is estimated that the machinery will have a $15,000 salvage value at the end of its 8-year useful life. What is the amount of accumulated depreciation on December 31, 2020, if the straight-line method of depreciation is used?arrow_forwardI am trying to find the accurate solution to this general accounting problem with appropriate explanations.arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education