Lewis Incorporated and Clark Enterprises report the following amounts for 2012.
____________________________________Lewis Clark
Inventory (beginning)..........................$ 14,000.......$ 40,000
Inventory (ending).................................8,000.........50,000
Purchases..........................................120,000.......150,000
Purchase returns.....................................5,000........50,000
Required:
1. 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. Explain which company appears to be managing its inventory more efficiently.