The following is information for Palmer Co. Cost of goods sold Ending inventory Year 3 $ 643,825 97,400 Year 2 $426,650 87,750 Year 1 $ 391,300 92,500 Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. (a) Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2 Numerator 1 Denominator = Ratio Inventory turnover $ 426,650 $ 90,125 4.7 times Days' sales in inventory
(b) Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. Numerator Denominator = Ratio Inventory turnover $ 643,825 1 $ 92,575 = 7.0 times Days' sales in inventory