Question

In: Accounting

Machlin provided the following data for 2008 and 2009: Inventory December 31, 2007 $174,000 December 31,...

Machlin provided the following data for 2008 and 2009:

Inventory
December 31, 2007 $174,000
December 31, 2008 187,000
December 31, 2009 196,000
Cost of goods sold
2008 $547,000
2009 586,000
Gross margin
2008 $253,000
2009 291,000

Do not round until your final answers. Round all calculations to two decimal places.

(a) Calculate the inventory turnover ratio for 2008 and 2009.
2008 ___ times
2009 ____ times

(b) Calculate the gross margin return on inventory investment for 2008 and 2009.
2008 _____
2009 _____

Solutions

Expert Solution

(a) Calculate the inventory turnover ratio for 2008 and 2009.

Average inventory 2008 = (174000+187000/2) = 180500

Average inventory 2009 = (187000+196000/2) = 191500

Inventory turnover ratio = Cost of goods sold/average inventory

                             2008 = 547000/180500 = 3.03 Times

                             2009 = 586000/191500 = 3.06 times

(b) Calculate the gross margin return on inventory investment for 2008 and 2009.

Gross margin return on inventory investment = Gross margin/average inventory

                                                     2008             = 253000*100/180500 = 140.17%

                                                    2009              = 291000*100/191500 = 151.96%

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Consider the data in the following table: Year 2004 2005 2006 2007 2008 2009 Stock A...
Consider the data in the following table: Year 2004 2005 2006 2007 2008 2009 Stock A -10% 20% 5% -5% 2% 9% Stock B 21% 7% 30% -3% -8% 25% Use the above information to answer the following questions. Round your answers to four decimal places (i.e. 0.0105). 1. Estimate the average return for stock A. 2. Estimate the average return for stock B. 3. Estimate the volatility of stock A. 4.Estimate the volatility of stock B. 5 .Estimate the...
The following information was reported by Gap, Inc. in its 2009 annual report. 2009 2008 2007...
The following information was reported by Gap, Inc. in its 2009 annual report. 2009 2008 2007 2006 2005 Total assets (millions) $7,985 $7,564 $7,838 $ 8,544 $ 8,821 Working capital 2,533 1,847 1,653 $ 2,757 $ 3,297 Current ratio 2.19:1 1.86:1 1.68: 2.21:1 2.70:1 Debt to total assets ratio .39:1 .42:1 .45: .39:1 .38:1 Earnings per share $1.59 $1.35 $1.05 $0.94 $1.26 (a) Determine the overall percentage decrease in Gap"s total assets from 2005 to 2009. What was the average...
End of Year Stock Price $ Returns % 2007 $ 20.91 ------- 2008 14.06 -32.76% 2009...
End of Year Stock Price $ Returns % 2007 $ 20.91 ------- 2008 14.06 -32.76% 2009 24.81 76.46 2010 35.57 43.37 2011 32.58 -8.41 2012 48.02 47.37 2013 67.43 40.42 2014 51.26 -23.98 2015 36.91 -27.99 2016 47.71 29.26 2017 44.55 -6.62 I received that correct answers, however I do not know how to solve them. Please write out equations for calculator use. Thank you. a.) What is the average return? ANSWER: 13.71% How do you get that? Show Work....
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2008 2007 2006...
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2008 2007 2006 (In millions except per share data) NET OPERATING REVENUES $31,944 $ 28,857 $ 24088 Cost of goods sold 11,374 10,406 8,164 GROSS PROFIT 20,570 18,451 15,924 Selling, general and administrative expenses 11,774 10,945 9,431 Other operating charges 350 254 185 OPERATING INCOME 8,446 7,252 6,308 Interest income 333 236 193 Interest expense 438 456 220 Equity income (loss) — net (874) 668 102 Other...
Consolidated Statements of Income Years ended December 31 ($ millions) 2010 2009 2008 Net sales $26,662...
Consolidated Statements of Income Years ended December 31 ($ millions) 2010 2009 2008 Net sales $26,662 $23,123 $25,269 Operating expenses Cost of sales 13,831 12,109 13,379 Selling, general and administrative expenses 5,479 4,907 5,245 Research, development and related expenses 1,434 1,293 1,404 Loss/(gain) from sale of business -- -- 23 Total operating expenses 20,744 18,309 20,051 Operating income 5,918 4,814 5,218 Interest expenses and income Interest expense 201 219 215 Interest income (38) (37) (105) Total interest expense 163 182...
A corporation reported the following information for years ending 12-31-2008 and 12-31-2007. Use this information to...
A corporation reported the following information for years ending 12-31-2008 and 12-31-2007. Use this information to compute free cash flow for the year ended 12-31-2008: DO NOT SHOW DOLLAR SIGNS OR COMMAS. IF YOUR ANSWER IS NEGATIVE PUT A MINUS SIGN IN FRONT OF YOU ANSWER.   12-31-2008      12-31-2007 CASH $2,000 $800 ACCTS RECEIVABLE $900          $700 INVENTORY $1,500 $1,800              NET PLANT/EQUIP $10,000 $7,000              ACCOUNTS PAYABLE $700 $500              ACCRUED WAGES $600 $500              EBIT $2,000 $1,000              DEPRECIATION...
Donellys, Inc. has prepared the following comparative balance sheets for 2007 and 2008: 2008 2007 Cash...
Donellys, Inc. has prepared the following comparative balance sheets for 2007 and 2008: 2008 2007 Cash $ 297,000 $ 153,000 Receivables 159,000 107,000 Inventory 150,000 180,000 Prepaid expenses 18,000 27,000 Plant assets 1,260,000 1,050,000 Accumulated depreciation (450,000) (375,000) Patent, net (intangible asset) 153,000 174,000 $1,587,000 $1,316,000 Accounts payable $ 153,000 $ 168,000 Accrued liabilities 60,000 42,000 Bonds payable 0 450,000 Preferred stock 645,000 0 Common stock 600,000 600,000 Retained earnings 129,000 56,000 $1,587,000 $1,316,000 1. The Accumulated Depreciation account has...
Between about December 2007 and June 2009, the United States was considered to be in a...
Between about December 2007 and June 2009, the United States was considered to be in a recession. The U.S. Gross Domestic Product fell approximately 3% from the third quarter of 2008 to the third quarter of 2009. Also, during December 2007 and June 2009, the Standard and Poor’s 500 index dropped by 38% and the unemployment rate climbed from 5% to 9.5%. The macroeconomic situation affected almost all companies since higher unemployment affected personal consumption, which dropped from 10,140.3 Billion...
Between about December 2007 and June 2009, the United States was considered to be in a...
Between about December 2007 and June 2009, the United States was considered to be in a recession. The U.S. Gross Domestic Product fell approximately 3% from the third quarter of 2008 to the third quarter of 2009. Also, during December 2007 and June 2009, the Standard and Poor’s 500 index dropped by 38% and the unemployment rate climbed from 5% to 9.5%. The macroeconomic situation affected almost all companies since higher unemployment affected personal consumption, which dropped from 10,140.3 Billion...
Between about December 2007 and June 2009, the United States was considered to be in a...
Between about December 2007 and June 2009, the United States was considered to be in a recession. The U.S. Gross Domestic Product fell approximately 3% from the third quarter of 2008 to the third quarter of 2009. Also, during December 2007 and June 2009, the Standard and Poor’s 500 index dropped by 38% and the unemployment rate climbed from 5% to 9.5%. The macroeconomic situation affected almost all companies since higher unemployment affected personal consumption, which dropped from 10,140.3 Billion...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT