Chapter 6, Problem S6.10SE

Computing the rate of inventory turnover and days’ sales in inventory

Learning Objective 6

Broadway Communications reported the following figures in its annual financial statements:

Cost of Goods Sold	$ 18,400
Beginning Merchandise Inventory	560
Ending Merchandise Inventory	450

Compute the rate of inventory turnover and days sales in inentory for Broadway Communications. (Round to two decimal places.)

Use the following information to answer Short Exercises S6A-11 through S6A-13.

The periodic inventory records of Flexon Prosthetics indicate the following for the month of July:

Jul. 1	Beginning merchandise inventory	6 units @ $ 60 each
8	Purchase	5 units @ $ 67 each
15	Purchase	10 units@ $ 70 each
26	Purchase	5 units @ $ 85 each

At July 31, Flexon counts four units of merchandise inventory on hand.