Question

The following information is available for Marin Inc. for three recent fiscal years. 2022 2021 2020 Inventory $565,000 $572,000 $320,000 Net sales 1,895,000 1,784,000 1,360,000 Cost of goods sold 1,421,250 1,159,600 930,000 (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 %

Answer 1

Answer:

Inventory turnover for 2022 =  1.25

Inventory turnover for 2021 =  1.3

Days Sales in Inventory for 2022= 145.10

Days Sales in Inventory for 2021= 180.044

Gross Profit Rate for 2022= 473750/1,895,000*100= 25%

Gross Profit Rate for 2021= 0.35 * 100= 35%

Explanation:

                      2022        2021     2020  

Inventory $565,000 $572,000 $320,000  

Net sales 1,895,000 1,784,000 1,360,000  

Cost of goods sold 1,421,250 1,159,600 930,000

Inventory turnover= Cost Of Goods Sold/ Average Inventory

Inventory turnover for 2022 =  1,421,250/ $565,000 + $572,000

Inventory turnover for 2022 =  1,421,250/ 1137,000

Inventory turnover for 2022 =  1.25

Inventory turnover for 2021 =  1,159,600/$572,000 + $320,000  

Inventory turnover for 2021 =  1,159,600/892,000

Inventory turnover for 2021 =  1.3

Days Sales in Inventory for 2022 = Ending Inventory/ Cost Of Goods Sold * 365

Days Sales in Inventory for 2022 =($565,000/1,421,250)*365

Days Sales in Inventory for 2022 =(0.3975)*365

Days Sales in Inventory for 2022= 145.10

Days Sales in Inventory for 2021 = Ending Inventory/ Cost Of Goods Sold * 365

Days Sales in Inventory for 2021 =$572,000 / 1,159,600 * 365

Days Sales in Inventory for 2021= 0.4933*365

Days Sales in Inventory for 2021= 180.044

Gross Profit Rate= Gross Profit/ Sales * 100

Gross Profit Rate= Sales - Cost Of Goods Sold / Sales * 100

Gross Profit Rate for 2022= 1,895,000-1,421,250/1,895,000* 100

Gross Profit Rate for 2022= 473750/1,895,000*100= 25%

Gross Profit Rate for 2021= 1,784,000 -1,159,600/ 1,784,000 * 100

Gross Profit Rate for 2021= 624,400/1,784,000 * 100

Gross Profit Rate for 2021= 0.35 * 100= 35%