Your firm's last three years of sales have been $1 million, $2 million, and $3 million (oldest to most recent). Year-end invento
ry was $250k, $500k, and $750k respectively. You are considering purchasing an inventory system that will double your inventory turnover. Which of the following is a good estimate for the amount you'll save with regard to inventory investment next year, assuming your sales will be $4 million - i.e., what's the difference between your estimates of inventory with the system and without? (Assume that your costs of goods sold stay at a constant percentage of sales throughout the past three years and next year; use same-year CoGS/Inv as your inventory turnover formula.)
Brand loyalty has everything to do with how consumers perceive your brand. This may be through promotional activities, reputation, or previous experiences with your company. Consumers are loyal to a brand because they believe you offer a better service and higher quality than anyone else.
In the perpetual inventory system, inventory and cost of goods sold are updated for each sale/purchase and return transaction.
A transaction of sale is noted through two journal entries in perpetual inventory system. The first journal entry is the sale value of inventory and the second journal entry is the cost of goods sold and reduces the inventory balance.
The first entry would be: Accounts Receivable 440 Sales 440
