Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

5.45 is correct. I fixed that and it didn't update Problem 3-14 Norton Industries recorded total cost of goods sold for 20x2 of $6.4 million.

image text in transcribedimage text in transcribed

5.45 is correct. I fixed that and it didn't update

Problem 3-14 Norton Industries recorded total cost of goods sold for 20x2 of $6.4 million. Norton had the following inventory balances for the months indicated (end of period balances): In Millions December, 20X1 $1.25 January, 20X2 1.65 February, 20x2 1.70 1.40 March, 20x2 April, 20x2 1.66 May, 20x2 1.93 June, 20X2 1.41 July, 20X2 1.81 August, 20X2 1.78 September, 20X2 1.25 1.61 October, 20X2 November, 20x2 1.63 December, 20x2 1.10 a. Compute inventory turnover for Norton using different methods to calculate the inventory figure. Round your answers to 2 decimal places. 1. End of year 5.82 x 2. Average of the beginning and end of year 5.45 x 3. Average of the ends of quarters (use the five quarter ends) 4.99 x 4. Average of the ends of months (use the 13 month ends) 4.12 x b. Which method provides the most accurate picture of Norton's inventory management? Average of the ends of months C. Which method do you think Norton is currently using? (Hint: See Limitations and weaknesses of Ratio Analysis.) Average of the ends of quarters Why? The input in the box below will not be graded, but may be reviewed and considered by your instructor. Problem 3-14 Norton Industries recorded total cost of goods sold for 20x2 of $6.4 million. Norton had the following inventory balances for the months indicated (end of period balances): In Millions December, 20X1 $1.25 January, 20X2 1.65 February, 20x2 1.70 1.40 March, 20x2 April, 20x2 1.66 May, 20x2 1.93 June, 20X2 1.41 July, 20X2 1.81 August, 20X2 1.78 September, 20X2 1.25 1.61 October, 20X2 November, 20x2 1.63 December, 20x2 1.10 a. Compute inventory turnover for Norton using different methods to calculate the inventory figure. Round your answers to 2 decimal places. 1. End of year 5.82 x 2. Average of the beginning and end of year 5.45 x 3. Average of the ends of quarters (use the five quarter ends) 4.99 x 4. Average of the ends of months (use the 13 month ends) 4.12 x b. Which method provides the most accurate picture of Norton's inventory management? Average of the ends of months C. Which method do you think Norton is currently using? (Hint: See Limitations and weaknesses of Ratio Analysis.) Average of the ends of quarters Why? The input in the box below will not be graded, but may be reviewed and considered by your instructor

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting IFRS

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

3rd edition

978-1119372936

Students also viewed these Finance questions