A company has $72,500 of inventory at the beginning of the year and $65,500 at the end of the year.Sales revenue is $986,400,cost of goods sold is $572,700,and net income is $124,200 for the year.The inventory turnover ratio is:
A)1.8.
B)8.3.
C)6.0.
D)14.3.

Question

Quizplus · Accepted Answer

Avg.inventory = (prior EB inventory + current EB inventory)/2
($72,500 + $65,500)/2 = $69,000
Inventory turnover ratio = COGS/Avg.Inventory
$572,700/$69,000 = 8.3.

A Company Has $72,500 of Inventory at the Beginning of the Year