The following account balances are taken from the records of Lewis Inc., a wholesaler of fresh fruits and vegetables:

Required
1. Compute Lewis€™s inventory turnover ratio for 2010 and 2009.
2. Compute the number of days€™ sales in inventory for 2010 and 2009. Assume 360 days in a year.
3. Comment on your answers in (1) and (2) relative to the company€™s management of inventory over the two years. What problems do you see in its inventorymanagement?

Transcribed Image Text:

December 31 2010 2009 2008 Merchandise inventory S 200,000 150,000 120,000 2010 2009 Cost of goods sold $7,100,000 8,100,000