Calculate inventory turnover

At December 31, 2004, the following information was available for Sherrick Hotel: ending inventory $80,000, beginning inventory $60,000, cost of goods sold $280,000, and sales revenue $380,000. Calculate inventory turnover and days in inventory for B. Sherrick Company.

Rome Restaurants, Inc. reports net income of $90,000 in 2004. However, ending inventory was understated $5,000.

What is the correct net income for 2004?

What effect, if any, will this error have on total assets as reported in the balance sheet at December 31, 2004?

Solution: