Topiary's Unlimited has a cost of goods sold of $1,500,000.The beginning merchandise inventory was $125,000 and its ending merchandise inventory is $175,000.Topiary's merchandise inventory turnover ratio is:

Question

Quizplus · Accepted Answer

Merchandise Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Average Inventory = ($125,000 + $175,000) / 2 = $150,000
Merchandise Inventory Turnover Ratio = $1,500,000 / $150,000
Merchandise Inventory Turnover Ratio = 10.0 times. 
Therefore, the best choice for the merchandise inventory turnover ratio is B - 10.0 times.

Topiary's Unlimited Has a Cost of Goods Sold of $1,500,000