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ACC 201: Financial Accounting (4226_9872) M Question 8 - Ch 5: Homework - Con Hint #0 Use the following information for Palmer Co. to compute inventory turnover for Year 3 and Year 2 and its days' sales in inventory at December 31, Year 3 and Year 2. Comment on Palmer's efficiency in using its assets to increase sales from Year 2 to Year 3. Average Inventory Year 3 Year 3 Year 2 Year 1 ($94,250 + $103,900) / 2 Cost of goods sold $568.825 $351 650 $316,300 Ending inventory 103,900 94,250 99,000 $99,075 Use the above information to compute inventory turnover for Year 2 and its days' sales in inventory at December 31, Year 2. Inventory turnover Cost of goods sold $351,650 3.6 times Average inventory $96,625 Days' sales in inventory Ending inventory x 365 $94,250 x 365 = 97 8 days Cost of goods sold $351,650 Use the above information to compute inventory turnover for Year 3 and its days' sales in inventory at December 31, Year 3 Inventory turnover Cost of goods sold $568,825 5.7 times Average inventory $99,075 pynight @ McGaw- Mar