Osborne Organic Foods, Inc., has the following information for the years ending December 31, 2018, and December 31, 2017:

Requirements

1. Compute the rate of inventory turnover for Osborne Organic Foods, Inc., for the years ended December 31, 2018, and December 31, 2017. Round the result to two decimal places.

2. Compute the days-sales-in-inventory for Osborne Organic Foods, Inc., for the years ended December 31, 2018, and December 31, 2017.

3. What is a likely cause for the change in the rate of inventory turnover from 2017 to 2018?

Transcribed Image Text:

2018 2017 $237,000 $243,000 Sales Revenue Cost of Goods Sold: $ 12,000 139,000 Cost of Goods Available 151,000 26,000 $ 8,000 126,000 134,000 12,000 Beginning Inventory Net Purchases Ending Inventory Cost of Goods Sold 125,000 118,000 42,000 $ 76,000 122,000 115,000 38,000 $ 77,000 Gross Profit Operating Expenses Net Income