Inventory Ratios

Inventory Ratios - Inventories Problem#1 FIFO Inventory...

This preview shows pages 1–3. Sign up to view the full content.

Inventories Problem #1 FIFO LIFO Inventory Inventory BB 5,000 BB 5,000 400 1,000 2/1 400 1,000 2/1 0 100 3/1 3,000 3/1 3,000 100 4,000 4/1 0 3,000 4/1 1,500 4/1 3,000 4/1 8,000 6,500 8,000 7,000 1,500 1,000 Sales 29,000 Sales 29,000 Cost of Goods Sold 6,500 Cost of Goods Sold 7,000 Gross Margin 22,500 Gross Margin 22,000 500@\$10 500@\$10 100@\$10 100@\$10 200@ \$15 200@ \$15 400@\$10 200@\$15 100@\$15 300@\$10

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
FIFO LIFO Inventory Inventory BB 5,000 BB 5,000 400 1,000 2/1 400 1,000 2/1 0 100 3/1 3,000 3/1 3,000 100 4,000 4/1 0 3,000 4/1 1,500 4/1 3,000 4/1 8,000 6,500 8,000 7,000 1,500 1,000 Sales 29,000 Sales 29,000 Cost of Goods Sold 6,500 Cost of Goods Sold 7,000 Gross Margin 22,500 Gross Margin 22,000 Inventory Turnover = Cost of Goods Sold / Average Inventory = # times Average Days' Sales in Inventory = 365 / Inventory Turn = # days Inventory Turnover 6,500/((5,000 + 1,500)/2) = 2.0000 times 7,000/((5,000 + 1,000)/2) = 2.3333 times Average Days' Sales in Inventory 365/2.0000 =
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/12/2010 for the course ACCT 101 taught by Professor Drkirch during the Spring '10 term at Ohio University- Athens.

Page1 / 4

Inventory Ratios - Inventories Problem#1 FIFO Inventory...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online