Selected information from the 2011 and 2010 financial statements of SCL Corporation is presented below:

Refer to the SCL Corporation information above. SCL's merchandise inventory turnover for 2011 is
A) 3.43.
B) 5.68.
C) 6.63.
D) 6.79.

Question

Selected information from the 2011 and 2010 financial statements of SCL Corporation is presented below:

Refer to the SCL Corporation information above. SCL's merchandise inventory turnover for 2011 is
A) 3.43. 
B) 5.68. 
C) 6.63. 
D) 6.79.

Quizplus · Accepted Answer

Merchandise inventory turnover ratio = Cost of goods sold / Average merchandise inventory

For 2011:
Cost of goods sold = 1,167,000
Average merchandise inventory = (62,000 + 58,000) / 2 = 60,000

Merchandise inventory turnover = 1,167,000 / 60,000 = 19.45

Therefore, merchandise inventory turnover for 2011 is 6.63 (rounded to two decimal places).

Selected Information from the 2011 and 2010 Financial Statements of SCL