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The following data are taken from the financial statements:
2009 2008
Net sales $2,480,000 $2,345,000 Cost of goods sold 1,480,000 1,407,000
Average monthly inventory 230,000 200,000
Inventory Ending 234,000 215,880
(a) Determine for 2009 and 2008 the merchandise inventory turnover. (b) Determine for 2009 and 2008 the number of days sales on ending inventory.
(c) Is the merchandise inventory turnover favorable or unfavorable trend from Year 2008 to Year 2009? F or U
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In 2009, Slimon Corporation began selling a new line of products that carries a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows:
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