The following information is available for Park Company at December 31, 2014: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $1,200,000; and sales $1,600,000. Park's inventory turnover in 2014 is
A) 16 times.
B) 15 times.
C) 12 times.
D) 10 times.

Question

Quizplus · Accepted Answer

Inventory turnover = (Cost of goods sold) / (Average Inventory)

Average Inventory = (Beginning Inventory + Ending Inventory) / 2 = ($80,000 + $120,000) / 2 = $100,000

Inventory turnover = $1,200,000 / $100,000 = 12 times.

The Following Information Is Available for Park Company at December