A Company Reported the Following Data Required:
1

question 142

Essay

A company reported the following data:
$$\begin{array} { | l | r | r | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Cost of goods sold } & \$ 425,000 & \$ 486,000 \\\hline \text { Foding inventory } & 140,000 & 175,000 \\\hline\end{array}$$ Required:
1. Calculate the days' sales in inventory for each year.
2. Comment on the trend in inventory management.

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Definitions:

Acquisition Differential

The difference between the cost of acquiring a company and the fair value of its identifiable net assets at the time of acquisition, essentially another term for goodwill.

Trademarks

Symbols, names, phrases, or logos legally registered or established by use as representing a company or product.

Unrealized Inventory Profits

Profits that have been recorded on paper due to an increase in inventory value but have not been realized through sales.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without having control over those policies.