The following data are taken from the financial statements:

	Current Year	Preceding Year
Sales	$3,600,000	$4,000,000
Cost of goods sold	2,000,000	2,700,000
Beginning inventory	372,000	352,000
Inventory, end of year	390,000	372,000

a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory.

1. The inventory turnover: (If required, round your answers to one decimal place.)

Current Year wrong answer :5.3

Preceding Year right answer : 7.5

2. The number of days' sales in inventory: Assume a 365-day year. (Round your intermediate calculation to whole number and final answers to two decimal places.)

Current Year wrong answer : 69.52 days

Preceding Year wrong answer : 48.92 days

b. Comment on the favorable and unfavorable trends revealed by the data.

Sales decreased while gross profit increased . The inventory turnover declined and the number of days' sales in inventory increased , which are unfavorable trends.

The following data are taken from the financial statements: Current Year Preceding Year Sales $3,600,000 $4,000,000 Cost of goods sold 2,000,000 2,700,000 Beginning inventory 372,000 352,000 Inventory, end of year 390,000 372,000 a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory. 1. The inventory turnover: (If required, round your answers to one decimal place.) Current Year 5.3 X Preceding Year 7.5 2. The number of days' sales in inventory: Assume a 365-day year. (Round your intermediate calculation to whole number and final answers to two decimal places.) Current Year 69.52 x days Preceding Year X days 48.92 b. Comment on the favorable and unfavorable trends revealed by the data. Sales decreased while gross profit increased The inventory turnover declined and the number of days' sales in inventory increased which are unfavorable trends