The Following Data Are Taken from the Financial Statements ?
(A)Determine for Each Year (1) the Inventory Turnover and

question 39

Essay

The following data are taken from the financial statements: $$\begin{array} { l r r } & \text { Current } &{ \text { Preceding } } \\& \text { Year } & \text { Year } \\\text { Net sales } & \$ 3,592,000 & \$ 4,056,000 \\\text { Cost of goods sold } & 2,092,000 & 2,656,000 \\\text { Average monthly inventory } & 332,000 & 328,000 \\\text { Inventory, end of year } & 372,000 & 347,000\end{array}$$ ?
(a)Determine for each year (1) the inventory turnover and (2) the days' sales in inventory.
(b)Comment on the favorable and unfavorable trends revealed by the data.

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Definitions:

Disputed Claim

A contested assertion of a right or demand that is subject to disagreement between parties.

Past Obligation

Obligations or duties that were required or expected to be fulfilled in the past.

Additional Consideration

Additional consideration involves extra benefits or compensation provided beyond the initial agreement, often to amend or enhance a contract.

Implied Contract

A contract formed in whole or in part from the conduct of the parties, rather than from written or spoken words.