The cost of goods sold for a company for the year was $1,900,000. Merchandise inventory at the beginning of the year was $125,000 and merchandise inventory at the end of the year was $133,000. The merchandise inventory turnover for the year was

Question

Quizplus · Accepted Answer

Merchandise inventory turnover = cost of goods sold / average merchandise inventory
Average merchandise inventory = (beginning merchandise inventory + ending merchandise inventory) / 2
Average merchandise inventory = ($125,000 + $133,000) / 2 = $129,000

Merchandise inventory turnover = $1,900,000 / $129,000 = 14.72

Therefore, the merchandise inventory turnover for the year was 14.7, closest to choice B.

The Cost of Goods Sold for a Company for the Year