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The following data are from the income statements of Haskin Company: 2015 2014 Sales $6,444,200...

Question:

The following data are from the income statements of Haskin Company:

2015 2014
Sales $6,444,200 $6,198,200
Beginning inventory 992,100 879,900
Purchases 4,398,800 4,659,800
Ending inventory 1,033,000 992,100

a. Compute for each year the inventory turnover.

b. Compute for each year the average days to sell the inventory.

Inventory:

Items available for sale or in the process of being manufactured for sale are called inventory and remain on the balance sheet as a current asset until sold. After the sale, the item's cost is transferred to cost of sales.

Answer and Explanation:

Question a.

Inventory turnover is an efficiency ratio which reports how successful a company has been in selling and repurchasing inventory over a...

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Efficiency Ratios: Types & Formula

from Accounting 101: Financial Accounting

Chapter 13 / Lesson 7
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