Jim had a beginning inventory of $5,500.During the month of April he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month.His sales for April were $8,750.What was his inventory turnover?
A)1)88 turns
B)86:1
C)45.7%
D)1)2 times

Question

Quizplus · Accepted Answer

The inventory turnover is calculated by dividing the cost of goods sold (COGS) by the average inventory. COGS = Beginning Inventory + Purchases - Ending Inventory = $5,500 + $4,000 - $3,800 = $5,700. Average Inventory = (Beginning Inventory + Ending Inventory) / 2 = ($5,500 + $3,800) / 2 = $4,650. Inventory Turnover = COGS / Average Inventory = $5,700 / $4,650 = 1.225, which rounds to approximately 1.2 or "1 times" when simplified for the options provided.

Jim Had a Beginning Inventory of $5,500