UP7-6(Inventory turnover and gross margin) The following selected information has been compiled for Sherwood Park Inc. Sherwood Park owns a series of discount clothing stores in Western Canada. 2020 2019 2018 Inventories $1,410,000 $1,300,000 $ 800,000 Sales revenue 6,046,000 5,500,000 4,160,000 Cost of goods sold 4,970,000 4,490,000 3,300,000 You are the new accountant hired by Sherwood Park. The owner tells you that, based on sales growth, the company is doing so well that expansion plans are under discussion. Required a. Calculate the: i. inventory turnover for 2019 and 2020 ii. number of days sales in inventory for 2019 and 2020 iii. gross margin and gross margin ratio for 2018, 2019, and 2020 b. Do you agree with the owner about the success of Sherwood Park? If not, what do your calculations show that contradicts the owner's opinion?

UP7-6 (Inventory turnover and gross margin) The following selected information has been compiled for Sherwood Park Inc. Sherwood Park owns a series of discount clothing stores in Western Canada. 2020 2019. 2018 Inventories $1,410,000 $1,300,000 $ 800,000 Sales revenue 6,046,000 5,500,000 4,160,000 Cost of goods sold 4,970,000 4,490,000 3,300,000 You are the new accountant hired by Sherwood Park. The owner tells you that, based on sales growth, the company is doing so well that expansion plans are under discussion. Required a. Calculate the: i. inventory turnover for 2019 and 2020 ii. number of days sales in inventory for 2019 and 2020 iii. gross margin and gross margin ratio for 2018, 2019, and 2020 b. Do you agree with the owner about the success of Sherwood Park? If not, what do your calculations show that contradicts the owner's opinion