From the given data for the current year, determine the inventory turnover. ? $$\begin{array} { l r }
\text { Net sales on account during the year } & \$ 316,780 \
\text { Cost of merchandise sold during the year } & 688,500 \
\text { Accounts receivable, beginning of year } & 47,000 \
\text { Accounts receivable, end of year } & 62,000 \
\text { Inventory, beginning of year } & 157,000 \
\text { Inventory, end of year } & 149,000
\end{array}$$
A) 3.8
B) 5.1
C) 4.5
D) 2.7

Question

From the given data for the current year, determine the inventory turnover. ? $$\begin{array} { l r } 
\text { Net sales on account during the year } & \$ 316,780 \
\text { Cost of merchandise sold during the year } & 688,500 \
\text { Accounts receivable, beginning of year } & 47,000 \
\text { Accounts receivable, end of year } & 62,000 \
\text { Inventory, beginning of year } & 157,000 \
\text { Inventory, end of year } & 149,000
\end{array}$$
A) 3.8
B) 5.1
C) 4.5
D) 2.7

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as the cost of goods sold divided by the average inventory. Here, the cost of goods sold is $688,500. The average inventory is calculated as (Beginning Inventory + Ending Inventory) / 2 = ($157,000 + $149,000) / 2 = $153,000. Therefore, the inventory turnover ratio is $688,500 / $153,000 = 4.5.

From the Given Data for the Current Year, Determine the Inventory