The following information was available for Camara Company at December 31, 2017: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Camara's inventory turnover in 2017 was
A)9.0 times.
B)7.9 times.
C)6.3 times.
D)5.3 times.

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as cost of goods sold divided by average inventory. Average inventory is calculated by adding beginning inventory and ending inventory and dividing by 2. Using these formulas, we can calculate Camara's inventory turnover as ($630,000 ÷ (($80,000 + $120,000) ÷ 2)) = 6.3 times.

The Following Information Was Available for Camara Company at December