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Use the following information for Palmer Co. to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. (Round answers to one decimal.) Comment on Palmer's efficiency in using its assets to increase sales from Year 2 to Year 3. Year 3 Year 2 Year 1 Cost of goods sold $643,825 $426,650 $391,300 Ending inventory 97,400 87,750 92,500

Use the following information for Palmer Co. to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. (Round answers to one decimal.) Comment on Palmer's efficiency in using its assets to increase sales from Year 2 to Year 3. Year 3 Year 2 Year 1 Cost of goods sold $643,825 $426,650 $391,300 Ending inventory 97,400 87,750 92,500

Accounting (Text Only)
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 7.8BPE
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The initial analysis should include the following:

  • The ratio equation
  • The calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. 
  • Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. 
  • Then explain whether this is a good result or a result that needs improving.
  • Use citations to cite any outside sources used.
  • The original post should include at least three (3) sentences but no more than seven (7) sentences.
Exercise 6-13 Inventory turnover and days' sales in inventory LA3 0 Use the following information for Palmer Co. to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. (Round answers to one decimal.) Comment on Palmer's efficiency in using its assets to increase sales from Year 2 to Year 3. Year 3 Year 2 Year 1 Cost of goods sold $643,825 $426,650 $391,300 Ending inventory 97,400 87,750 92,500
Transcribed Image Text:Exercise 6-13 Inventory turnover and days' sales in inventory LA3 0 Use the following information for Palmer Co. to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. (Round answers to one decimal.) Comment on Palmer's efficiency in using its assets to increase sales from Year 2 to Year 3. Year 3 Year 2 Year 1 Cost of goods sold $643,825 $426,650 $391,300 Ending inventory 97,400 87,750 92,500
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