Question
In: Accounting
Early in 2022, Blossom Company switched to a just-in-time inventory system. Its sales and inventory amounts...
Early in 2022, Blossom Company switched to a just-in-time
inventory system. Its sales and inventory amounts for 2021 and 2022
are shown below.
|
2021 |
2022 |
|||
|---|---|---|---|---|
|
Sales revenue |
$3,450,000 | $3,900,000 | ||
|
Cost of goods sold |
1,292,000 | 1,858,500 | ||
|
Beginning inventory |
155,000 | 225,000 | ||
|
Ending inventory |
225,000 | 90,000 |
Determine the inventory turnover for 2021 and 2022.
(Round answers to 1 decimal place, e.g.
5.1.)
|
2021 |
2022 |
|||||
|---|---|---|---|---|---|---|
|
Inventory turnover |
||||||
Determine the days in inventory for 2021 and 2022.
(Round answers to 1 decimal place, e.g.
5.1.)
|
2021 |
2022 |
|||||
|---|---|---|---|---|---|---|
|
Days in inventory |
||||||
Solutions
Expert Solution
Inventory turnover or Inventory turnover ratio is the number of times a company has sold and replaced its inventory during a given period. It is calculated as :
Inventory Turnover = Cost of Goods Sold / Average Inventory
where,
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Compuation of Inventory Turnover for 2021 and 2022
Inventory Turnover 2021 = Cost of Goods Sold / Average
Inventory
= 1,292,000 / [ ( 155,000 + 225,000) / 2 ]
= 1,292,000 / 190,000
= 6.8
Inventory Turnover 2022 = Cost of Goods Sold / Average
Inventory
= 1,858,500 / [ ( 225,000 + 90,000 ) / 2 ]
= 1,858,500 / 157,500
= 11.8
Computation of Days in Inventory for 2021 and 2022
Days in inventory refers to number of days it takes for inventory to turn into sales.
Days in Inventory 2021 = 365 / Inventory turnvover = 365 / 6.8 =
53.68
days
Days in Inventory 2022 = 365 / Inventory Turnover = 365 / 11.8 =
30.93
days
ekkarill92 answered 1 year agoRelated Solutions
A microwave manufacturing company has just switched to a new automated production system. Unfortunately, the new...
A microwave manufacturing company has just switched to a new
automated production system. Unfortunately, the new machinery has
been frequently failing and requiring repairs and service. The
company has been able to provide its customers with a completion
time of 6 days or less. To analyze whether the completion time has
increased, the production manager took a sample of 36 jobs and
found that the sample mean completion time was 6.5 days with a
sample standard deviation of 1.5 days....
Walmart (WMT) is famously known for its Just in Time Inventory Management system, how do you...
Walmart (WMT) is famously known for its Just in Time Inventory
Management system, how do you think the system has played a role in
the company’s profitability?
Blossom Company uses a periodic inventory system. For April, when the company sold 550 units, the...
Blossom Company uses a periodic inventory system. For April,
when the company sold 550 units, the following information is
available.
Units
Unit Cost
Total Cost
April 1 inventory
300
$33
$ 9,900
April 15 purchase
440
40
17,600
April 23 purchase
260
43
11,180
1,000
$38,680
Compute the April 30 inventory and the April cost of goods sold
using the LIFO method.
Ending inventory
$enter a dollar amount
Cost of goods sold
$enter a dollar amount
Blossom Company uses a periodic inventory system. For April, when the company sold 550 units, the...
Blossom Company uses a periodic inventory system. For April,
when the company sold 550 units, the following information is
available.
Units
Unit Cost
Total Cost
April 1 inventory
300
$33
$ 9,900
April 15 purchase
440
40
17,600
April 23 purchase
260
43
11,180
1,000
$38,680
Compute the April 30 inventory and the April cost of goods sold
using the FIFO method.
Ending inventory
$enter a dollar amount
Cost of goods sold
$enter a dollar amount
Blossom Company uses a periodic inventory system. For April, when the company sold 550 units, the...
Blossom Company uses a periodic inventory system. For April,
when the company sold 550 units, the following information is
available.
April 1 inventory
300
$33
$ 9,900
April 15 purchase
440
40
17,600
April 23 purchase
260
43
11,180
1,000
$38,680
Compute the April 30 inventory and the April cost of goods sold
using the LIFO method.
Ending Inventory $
Cost of goods sold $
Compute the April 30 inventory and the April cost of goods sold
using the FIFO...
Blossom Company is trying to determine the value of its ending inventory as at February 28,...
Blossom Company is trying to determine the value of its ending
inventory as at February 28, 2017, the company’s year end. The
accountant counted everything that was in the warehouse as at
February 28, which resulted in an ending inventory valuation of
$61,000. However, he was not sure how to treat the following
transactions, so he did not include them in inventory.
For each of the below transactions, specify whether the item
should be included in ending inventory, and if...
You are the controller of a company that has just switched to IFRS. For the area...
You are the controller of a company that has just switched to
IFRS. For the area of PP&E you have asked the programmer for
the PP&E system to include a routine that forces users to
re-enter information each year. For which field would it be
appropriate to include in this routine.
a. Residual value
b. Asset name
c. Cost
d. Date placed in service
Blossom Corp.’s sales slumped badly in 2020. For the first time in its history, it operated...
Blossom Corp.’s sales slumped badly in 2020. For the first time
in its history, it operated at a loss. The company’s income
statement showed the following results from selling 505,500 units
of product: sales $2,527,500, total costs and expenses $2,611,625,
and net loss $84,125. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,146,565
$1,733,865
$412,700
Selling expenses
252,750
93,012
159,738
Administrative expenses
212,310
68,748
143,562
$2,611,625
$1,895,625
$716,000
Management is considering the...
1) Calculate the missing amounts for each company. Sales Revenue Beginning Inventory Inventory Purchases Ending Inventory...
1) Calculate the missing amounts for each company.
Sales
Revenue
Beginning
Inventory
Inventory
Purchases
Ending
Inventory
COGS
Gross
Profit
Company 1
$100,000
$20,000
$65,000
$22,000
A
B
Company 2
$140,000
$25,000
C
$30,000
D
$45,000
Company 3
E
F
$45,000
$20,000
$50,000
$35,000
Company 4
$85,000
$10,000
$30,000
G
$35,000
H
Blossom Company expects to have a cash balance of $23,000 on January 1, 2022. These are...
Blossom Company expects to have a cash balance of $23,000 on
January 1, 2022. These are the relevant monthly budget data for the
first two months of 2022.
1.
Collections from customers: January $35,500, February
$73,000.
2.
Payments to suppliers: January $20,000, February $37,500.
3.
Wages: January $15,000, February $20,000. Wages are paid in the
month they are incurred.
4.
Administrative expenses: January $10,500, February $12,000.
These costs include depreciation of $500 per month. All other costs
are paid as...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Please answer these questions Data Processing and Analysis using python. Thank you In statistics, an outlier...
- Write a function file that accepts each of the four vectors as inputs. The function file...
- Kant says that to act morally is to act out of duty. How does this differ...
- Suppose you are trying to determine the capacity (in gallons) of the gas tank needed on...
- List the arithmetic operators used in BASIC and state their priorities of execution in a statement....
- Describe the espoused values of a company you have worked for (or been exposed to -...
- Can you explain to me the differnces in how we paid for the health care (access...
ADVERTISEMENT