Inventory Turnover and Number of Days' Sales in Inventory The following financial statement data for years ending December 31 for Gillispie Company are shown below. 2016 2015 Cost of merchandise sold $1,051,200 $659,628 Inventories: Beginning of year $215,350 $151,110 End of year 310,250 215,350 a. Determine the inventory turnover for 2016 and 2015. Round to one decimal place. Inventory Turnover 2016 2015 b. Determine the number of days' sales in inventory for 2016 and 2015. Assume 365 days a year. Round interim calculations and final answers to one decimal place. Number of Days' Sales in Inventory 2016 days 2015 days c. Does the change in inventory turnover and the number of days' sales in inventory from 2015 to 2016 indicate a favorable or an unfavorable trend? Favorable Effect of Inventory Errors During the taking of its physical inventory on December 31, 2014, Zula Company incorrectly counted its inventory as $157,690 Instead of the correct amount of $168,730. Indicate the effect of the misstatement on Zula's December 31, 2014, balance sheet or income statement for the year ended December 31, 2014. For each, select if the amount is overstated or understated. Then, input the over or under amount, entered as a positive value. , Cost of merchandise sold Income Statement Understated Current assets Balance Sheet Overstated Gross profit Income Statement Overstated Merchandise inventory Balance Sheet Overstated Net income Income Statement Overstated Owner's equity Balance Sheet Overstated sl Total assets Balance Sheet Overstated ) Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 13 units at $25 $325 July 7 Purchase 8 units at $28 224 Nov. 23 Purchase 17 units at $29 493 38 units $1,042 There are 15 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first in, first-out (FIFO) method: (b) the last-In, first-out (LIFO) method: and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar). a-() in, a. First-in, first-out (FIFO) b. - Last-in, first-out (LIFO) cWeighted average cost Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10. Unit Cost Unit Market Item Inventory Quantity Price Price CK3) 58 $23 $26 VZ31 117 11 6
