The Following Account Balances Are Taken from the Records of Clarke

question 14

Essay

The following account balances are taken from the records of Clarke Inc., a wholesaler:

1. Compute Clarke's inventory turnover ratio for 2016 and 2015.
2. Compute the number of days' sales in inventory for 2016 and 2015. 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 inventory management?

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Definitions:

Unenforceable

Describes a contract or agreement that, due to certain defects or limitations, cannot be legally upheld or compelled by a court.

Convention on Contracts

An international agreement or treaty that establishes uniform rules for commercial contracts between parties from different countries.

International Sale of Goods

Transactions involving the purchase and sale of goods across international borders, governed by specific treaties and laws such as the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Aggrieved Seller

Refers to a seller who has suffered from a breach of contract or harm due to the buyer's actions or inactions.