Financial statement data for years ending December 31 for Amsterdam Company follow:

20Y4

Cost of merchandise sold

20Y3

$843,880

Inventories:

$501,729

Beginning of year

End of year

203,670

142,350

292,730

203,670

a. Determine the inventory turnover for 20Y4 and 203. Round to one decimal place.

Inventory Turnover

20Y4

20Y3

b. Determine the days' sales in inventory for 204 and 20Y3. Assume 365 days a year. Round interim calculations and final answers to one decimal place.

20Y4

20Y3

Days' Sales in Inventory

days

days.

c. Does the change in the inventory turnover and the days' sales in inventory from 203 to 204 indicate a favorable or an unfavorable trend?