The following accounting information pertains to Clemens Corp. and Twain Inc. at the end of 2009. The only difference between the two companies is that Clemens uses FIFO while Twain uses LIFO.

Required
a. Compute the gross margin percentage for each company, and identify the company that appears to be charging the higher prices in relation to its costs.
b. For each company, compute the inventory turnover ratio and the average number of days to sell inventory. Identify the company that appears to be incurring the higher inventory financing cost.
c. Explain why the company with the lower gross margin percentage has the higher inventory turnoverratio.

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Clemens Twain Cash Accounts receivable Merchandise inventory Accounts payable Cost of goods sold Building Sales S 75,000 S75,000 200,000 100,000 160,000 650,000 250,000 1,000,000 00,000 200,000 150,000 160,000 600,000 250,000