In: Accounting
Use the Following Information to Compute the Ratios Below Cost of Goods Sold for 12-31-2014 = 750,000 Cost of Goods Sold for 12-31-2013 = 900,000 Ending Inventory 12-31-2014 = 75,000 Ending Inventory 12-31-2013 = 25,000 Sales Revenues 12-31-2014 = $1,000,000 Sales Revenues 12-31-2013 =$1,500,000 Inventory Turnover Ratio = COGS / Average Inventory Days-in-Inventory = 365/ Inventory Turnover Ratio
Compute the Inventory Turnover Ratio for Year Ended 12-31-2014
Compute the Days In Inventory for the Year Ended 12-31-2014
NEXT QUESTION
Which One of the Entries Below would be included in the Journal Entry to record the Following Transaction:
Our Business Provided Goods to a Customer for $200,000 on Account.
The Cost of the Goods was $150,000, using a Perpetual System.
Debit to Cost of Goods Sold for $50,000
Debit to Accounts Receivable for $150,000
Debit to Cash for $200,000
Credit to Net Income for $50,000
Debit to Cash for $150,000
Credit to Inventory for $200,000
None of These Choices
Credit to Cash $200,000
Credit to Inventory for $150,000
INVENTORY TURNOVER RATIO FOR THE YEAR 12-31-2014
INVENTORY TURNOVER RATIO= COST OF GOODS SOLD/ AVERAGE INVENTORY
COST OF GOODS SOLD = $750000
AVERAGE INVENTORY= OPENING INVENTORY+ CLOSING INVENTORY
2
OPENING INVENTORY =25000 ; CLOSING INVENTOY= 75000
AVERAGE INVENTORY= (25000+75000)/2= 50000
INVENTORY TURNVER RATIO= 750000/50000= 15 TIMES
NUMBER OF DAYS = 365/ INVENTORY TURNOVER RATIO
=365/15
= 24.33 DAYS
IT CAN BE 24 DAYS
NEXT QUESTION ANSWER:
Credit to Net Income for $50,000
Debit to Cash for $150,000
Credit to Inventory for $200,000