excersie 5-19

222 Chapter 5 Reporting and Analyzing Inventories Check (1) FIFO: Current ratio, 1.5, Inventory turnovec 38 times 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year numbers and (b) FIFO numbers. 2. Comment on and interpret the results of part 1 Exercise 5-19 Inventory turnover and days' sales in inventory Use the following information for Palmer Co. to compute inventory turnover for Year 3 and You days' sales in inventory at December 31, Year 3 and Year 2. From Year 2 to Year 3, did Pane its (a) inventory turnover and (b) days' sales in inventory? Year 3 Year 2 Year 1 Cost of goods sold Ending inventory $643,825 97.400 $426,650 87.750 $391,300 92,500 Exercise 5-20 Estimating ending Inventory-retail method P4 Dakota Company had net sales (at retail) of $260.000. The following additional information in from its records. Use the retail inventory method to estimate Dakota's year-end inventory alex Al Cost At Retail Check End, inventory at cost $35.860 Beginning inventory Cost of goods purchased. $ 63.800 115,060 $128.400 196,800 Exercise 5-21 Estimating ending inventory-gross profit method P4 On January 1, JKR Shop had $225,000 of beginning inventory at cost. In the first quarter of purchased $795,000 of merchandise, returned $11.550, and paid freight charges of $18.80001 merchandise, terms FOB shipping point. The company's gross profit averages 30%, and the Use the gross profit method to estimate its cost of inventory at the end of the first quarter $1,000,000 of net sales (at retail) in the first quarter of the year