The 2010 financial statements of Hurley Company reported a beginning inventory of $130,000, an ending inventory of $140,000, and cost of goods sold of $650,000 for the year.Hurley's inventory turnover ratio for 2010 is
A)2.9 times.
B)3.4 times.
C)4.8 times.
D)4.0 times.

Question

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory
Average inventory = (Beginning inventory + Ending inventory) / 2
Average inventory = ($130,000 + $140,000)/2 = $135,000

Inventory turnover ratio = $650,000 / $135,000 = 4.8 times. Therefore, the correct answer is option C.

The 2010 Financial Statements of Hurley Company Reported a Beginning