Sputter Motors has sales of $3,450,000, total assets of $1,240,000, cost of goods sold of $2,550,000, and an inventory turnover of 6.38. What is the amount of Sputter's inventory?
A) $421,054
B) $638,112
C) $543,000
D) $399,687

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as Cost of Goods Sold divided by Inventory. Rearranging the formula to find Inventory gives Inventory = Cost of Goods Sold / Inventory Turnover. Plugging in the values: $2,550,000 / 6.38 = $399,687.

Sputter Motors Has Sales of $3,450,000, Total Assets of $1,240,000