Question

Claremont Corp. has the following inventory balances for 2009: beginning, $468,000; ending, $444,000. The company’s Cost of Goods Sold for the year was $4,370,400.
Required:
(a) What is Claremont Corp.’s average inventory for 2009?
(b) What is the company’s inventory turnover ratio?
(c) Calculate the average age of inventory for Claremont Corp.
(d) Assume that Claremont Corp. is a retail toy company, and its fiscal year-end is December 31. Would Claremont’s inventory be at an annual high or low at the end of the year? In this situation, would the inventory turnover ratio provide valid information to a decision maker? Why or why not?
(e) Given the information in part (d), how might you obtain a better indication of the average amount of inventory that Claremont Corp. had on hand during the year?


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  • CreatedMarch 27, 2015
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