Chapter 6, Problem E6.25E

Computing inventory turnover and days’ sales in inventory

Learning Objective 6

Calm Day reported the following income statement for the year ended December 31, 2019.

CALM DAY

Income Statement

Year Ended December 31, 2019 Net Sales Revenue $ 128, 000 Cost of Goods Sold Beginning Merchandise Inventory $ 9,000 Net Cost of Purchases 62,000 Cost of Goods Available for Sale 71,000 Cost of Goods Sold 58,800 Gross Profit 69,200 Operating Expenses 41,600 Net Income $ 27,600

Requirements

1. Compute Calm Day’s inventory turnover rate for the year. (Round to two decimal places.)
2. Compute Calm Day’s sales in inventory for the year. (Round to two decimal places.)