Mgmt 200 Assignment Soln 3-2-11

Mgmt 200 Assignment Soln 3-2-11 - Management 200...

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Management 200 – Introductory Financial Accounting– Spring 2011 Krannert School of Management - Purdue University Solutions to class assignment for March 2, 2011 Additional Perspectives 6-3 Requirement 1 The company uses the lower of weighted-average cost or market value. Requirement 2 The amount of inventory reported in the balance sheet is $88,187. This amount represents the cost, less any write-downs, of inventory that has not been sold by the end of the year. Requirement 3 The company refers to cost of goods sold as cost of sales. Requirement 4 The amount of cost of goods sold reported in the income statement is $497,668. This amount represents the cost of inventory sold during the year. Requirement 5 Inventory turnover ratio = Cost of goods sold = $497,668 = 5.8 Average inventory $86,075 Average days in inventory = 365 = 365 = 62.9 days Inventory turnover ratio 5.8 Requirement 6 2010 2009 2008 Gross profit ratio = Gross profit = 0.45 0.43 0.41 Net sales Requirement 7 Operating Expenses = $201,157 = 0.22 Net sales $898,287
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This note was uploaded on 02/27/2012 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue.

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Mgmt 200 Assignment Soln 3-2-11 - Management 200...

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