Zhang Company reported Cost of goods sold of $835,000,beginning Inventory of $37,200 and ending Inventory of $46,300.The Inventory turnover ratio is:
A)0.5 times.
B)418 times.
C)20 times.
D)56 times.
E)19 times.

Question

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory
Average inventory = (Beginning inventory + Ending inventory) / 2
Average inventory = ($37,200 + $46,300) / 2 = $41,750

Inventory turnover ratio = $835,000 / $41,750 = 20 times

Zhang Company Reported Cost of Goods Sold of $835,000,beginning Inventory