21. Which of the following should be used to calculate a company's inventory turnover ratio? Cost of goods sold for the year Sales with credit terms Sales revenues e sheets reported inventory amounts that $400,000 and cost of goods sold of $300 Total revenues 22. During the previous year, a corporation's balance sheets reported inventory amounts that averaged $50,000. Its income statement for the year reported sales of $400,000 and cost of goods sold of $300,000. What was the corporation's inventory turnover ratio for the year? 0.1 times 0.2 times 6.0 times solete items at their original cost of $40,000. If the obsolete item rking capital and liquidity ? 8.0 times 23. Assume that a company's inventory contains obsolete items at their original cost of $40,000. If the obsolete items are sold for $5,000 what will be the effect on working capital and liquidity? Working capital and liquidity will decrease Working capital and liquidity will increase esult in an increase or decrease in days' sales in inventory? Working capital will decrease and liquidity will increase Working capital will increase and liquidity will decrease 24. Will an increase in the inventory turnover ratio result in an increase or decrease in days' sales in inventory? Increase Decrease 25. A company's monthly balance sheets during the past year reported an average amount of inventory of $180,000. Its income statement reported sales for that year of $2,700,000 and cost of goods sold of $1,800,000. Which of the following is closest to the days' sales in inventory for the recent year? 10 days 15 days near-term effect on liquidity? 24 days 36 days 26. If a company expands its operations, what is the near-term effect on liquidity? Liquidity increases Liquidity decreases
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