Question

Current Attempt in Progress The following information is available for Zoe’s Activewear Inc. for three recent fiscal years. 2022 2021 2020 Inventory $553,000 $568,000 $332,000 Net sales 1,948,000 1,725,000 1,311,000 Cost of goods sold 1,552,000 1,288,000 947,000 (a) Calculate the inventory turnover, days in inventory, and gross profit rate for 2022 and 2021. (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%.) 2022 2021 Inventory Turnover enter an inventory turnover times enter an inventory turnover times Days in Inventory enter a number of days days enter a number of days days Gross Profit Rate enter percentages % enter percentages % eTextbook and Media

Answer 1

Answer:

2022:

TO 3.48

Days outstanding: 105

Gross Profit rate: 20.33%

2021:

TO 3.83

Days Outstanding 95

Gross profit rate: 25.33%

Explanation:

2022

$\frac{Sales}{Average Inventory} = Inventory Turnover$

​where:

$Average Inventory=(Beginning Inventory + Ending Inventory)/2$

Sales for 2022:           $  1,948,000

Average Inventory:  (553,000 +586,000)/2 =560,500

$\frac{1948000}{560500} = Inventory Turnover$

Inventory TO 3.475468332

$\frac{365}{Inventory TO} = Days on Inventory$

$\frac{365}{3.47546833184657} = Days on Inventory$

Days on Inventory 105

Gross Profit Rates:

$\frac{Gross \: Profit}{sales} \times100$

(1,948,000 - 1552,000)/1,948,000 x 100 = 20.33%

2021:

Sales 1725000

Average Inventory (332,000 + 568,000)/2 = 450,000

$\frac{1725000}{450000} = Inventory Turnover$

Inventory TO 3.833333333

$\frac{365}{3.83333333333333} = Days on Inventory$

Days on Inventory 95

Gross Profit Rates:

$\frac{Gross \: Profit}{sales}\times 100$

(1,725,000 - 1,288,000)/1,725,000 = 25.33%