Exercise 6-12 The following information is available for Cullumber Company for t
ID: 2568994 • Letter: E
Question
Exercise 6-12
The following information is available for Cullumber Company for three recent fiscal years.
2017
2016
2015
Calculate the inventory turnover, days in inventory, and gross profit rate for 2017 and 2016. (Round inventory turnover to 1 decimal place, e.g. 5.2, days in inventory to 0 decimal places, e.g. 125 and gross profit rate to 1 decimal place, e.g. 5.2%.)
2017
2016
2015
Inventory $562,811 $569,532 $325,890 Net sales 1,978,222 1,746,610 1,300,667 Cost of goods sold 1,560,073 1,309,350 940,444Explanation / Answer
Calculations Particulars 2017 2016 2015 A Inventory 562,811 569,532 325,890 B Net Sales 1,978,222 1,746,610 1,300,667 C Cost of goods sold 1,560,073 1,309,350 940,444 D = (A of previous year + A of current year) / 2 Average inventory 566,172 447,711 E = C / D Inventory Turnover 2.8 2.9 F = 365 / E Days in Inventory 132 125 G = B - C Gross Profit 418,149 437,260 H = G / B Gross Profit rate 21.1% 25.0%