Question
1. The Lauchli Co. showed the following data in its financial statements: 2018 2017 Cost of goods sold $1,400,000 $1,120,000 Beginning inventory 270,000 177,000 Ending
1. The Lauchli Co. showed the following data in its financial statements:
|
| 2018 | 2017 |
| Cost of goods sold | $1,400,000 | $1,120,000 |
| Beginning inventory | 270,000 | 177,000 |
| Ending inventory | 407,000 | 270,000 |
1a. Compute days sales in average inventory for both years. Also compute the rate of change from 2017 to 2018. What can you infer from the trend?
1b. How would you interpret these results if the company sold fresh fruit and vegetables? What if they sold heavy equipment?
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Cima Official Exam Practice Kit Financial Accounting And Tax Principles 2008 Edition
Authors: Mike Rogers, John Dunn
4th Edition
0750686901, 978-0750686907
