Question

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

Answer 1

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