Lewis Incorporated and Clark Enterprises report the following amounts for the year.Inventory (beginning)Inventory (ending)PurchasesPurchase returnsRequired:Lewis$25,000Clark$51,00019,00061,000276,200244,60016,00061,0001. Calculate cost of goods sold for each company.2. Calculate the inventory turnover ratio for each company.3. Calculate the average days in inventory for each company.4. Which company appears to be managing its inventory more efficiently?Complete this question by entering your answers in the tabs below.Required 1Required 2 Required 3Required 4Calculate cost of goods sold for each company.Beginning inventoryCost of goods available for saleCost of goods soldLewisClark

1: Lewis:Cost of goods sold: $266,200 Clark:Cost of goods sold: $173,600 2: Lewis: Inventory…

Answered: Lewis Incorporated and Clark…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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Inventory Analysis Singleton Inc. reported the following information for the current year: Required: Compute Singletons (a) gross profit ratio, (b) inventory turnover ratio, and (c) average days to sell inventory. (Note: Round all answers to two decimal places.)
The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: During the year, Arnn had net sales of 2.45 million. The cost of goods sold was 1.3 million. Required: Note: Round all answers to two decimal places. 1. Compute the current ratio. 2. Compute the quick or acid-test ratio. 3. Compute the accounts receivable turnover ratio. 4. Compute the accounts receivable turnover in days. 5. Compute the inventory turnover ratio. 6. Compute the inventory turnover in days.
Compute Altoona Companys (a) inventory turnover ratio and (b) number of days sales in inventory ratio, using the following information.
Compute Westtown Companys (A) inventory turnover ratio and (B) number of days sales in inventory ratio, using the following information.
Inventory Analysis Callahan Company reported the following information for the current year. Required: 1. Compute Callahans (a) gross profit ratio, (b) inventory turnover ratio, and (c) average days to sell inventory. (Round all answers to two decimal places.) 2. Explain the meaning of each number.
Inventory analysis A company reports the following: Determine (a) the inventory turnover and (b) the number of days sales in inventory. Round to one decimal place.
Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following data: Required: 1. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the FIFO inventory costing method. Be sure to explain what each ratio means. 2. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the LIFO inventory costing method. Be sure to explain what each ratio means. 3. CONCEPTUAL CONNECTION Which ratios-the ones computed using FIFO or LIFO inventory values-provide the better indicator of how successful McLelland was at managing and controlling its inventory?
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Beginning inventory, purchases, and sales for 30xT are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the May 23 purchase, (b) the cost of the merchandise sold on May 26, and (c) the inventory on May 31.
Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of the merchandise sold on October 29, and (c) the inventory on October 31.
Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for Cuneo Company above. Required: 1. Prepare a common-size income statement for Year 1 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 2. Prepare a common-size income statement for Year 2 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 3. Prepare a common-size income statement for Year 3 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.)
Financial statement data for years ending December 31 for Holland Company follow: a. Determine the inventory turnover for 20Y4 and 20Y3. b. Determine the days sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place. c. Does the change in inventory turnover and the days sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?

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