A television manufacturer would like to reduce its inventory. To this end, you are asked by the operations manager to assess its inventory level
You have the following information on average inventories from last year's financial statement:
Raw materials $1,500,000
Work-in-process $1,200,000
Finished goods $800,000
In addition, the cost of goods sold last year (50 weeks) was $20 million.
a. What is its total inventory (measured as weeks of supply)?
b. What is its inventory turnover?
a. Weeks of supply = average aggregate inventory value/weekly sales at cost =
(1,500,000 + 1,200,000 + 800,000)/(20,000,000/50 ) = 8.75 weeks
b. Inventory turnover = annual sales (at cost)/average aggregate inventory value =
20 million/3.5 million = 5.71
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A merchandiser purchased inventory on account for $17,000. In a periodic inventory system, the journal entry to record the purchase would include ________.
A) a debit to Purchases for $17,000 and a credit to Accounts Payable for $17,000 B) a debit to Accounts Payable for $17,000 and a credit to Purchases for $17,000 C) a debit to Merchandise Inventory for $17,000 and a credit to Accounts Payable for $17,000 D) a debit to Accounts Payable for $17,000 and a credit to Merchandise Inventory for $17,000
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Indicate whether the statement is true or false
Ad hoc is a Latin word, meaning ________
A) out of chaos B) from one, many C) by that very act D) with respect to a specific purpose E) and the rest
What distinguishes liabilities from equity?
What will be an ideal response?