The following balance sheet information is provided for Gaynor Company:

Assuming Year 2 cost of goods sold is $153,300,what is the company's inventory turnover?
A)4.0 times
B)4.4 times
C)4.2 times
D)None of these answers is correct.

Question

The following balance sheet information is provided for Gaynor Company:

Assuming Year 2 cost of goods sold is $153,300,what is the company's inventory turnover?
A)4.0 times 
B)4.4 times 
C)4.2 times 
D)None of these answers is correct.

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ [(Beginning inventory + ending inventory)÷ 2]
Inventory turnover = $153,300 ÷ [($38,000 + $35,000)÷ 2] = $153,000 ÷ $36,500 = 4.2 times

The Following Balance Sheet Information Is Provided for Gaynor Company