Island Industries has a cost of goods sold of $1,900,000. The beginning and ending merchandise inventories are $130,000 and $122,000, respectively. Island Industries inventory turnover ratio is: (Round your final answer to two decimal places.)

Question

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory

Average inventory = (Beginning inventory + Ending inventory) / 2

Average inventory = ($130,000 + $122,000) / 2 = $126,000

Inventory turnover ratio = $1,900,000 / $126,000 = 15.08 times

Therefore, the best choice is C, with an inventory turnover ratio of 15.08 times.

Island Industries Has a Cost of Goods Sold of $1,900,000