Bono Company reported sales of $900,000, cost of goods sold of $600,000, and a gross profit of $300,000 for the year. Bono's beginning inventory was $120,000; the ending inventory at December 31, was $100,000.
Bono's inventory turnover for the year is:

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as Cost of Goods Sold divided by Average Inventory. Average Inventory = (Beginning Inventory + Ending Inventory) / 2 = ($120,000 + $100,000) / 2 = $110,000. Inventory Turnover = $600,000 / $110,000 = 5.45.

Bono Company Reported Sales of $900,000, Cost of Goods Sold