Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The inventory turnover for Year 2 is closest to:

Question

Excerpts from Colter Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The inventory turnover for Year 2 is closest to:

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ Average inventory balance
= $720 ÷ $165* = 4.36 (rounded)
*Average inventory balance = ($170 + $160)÷ 2 = $165

Excerpts from Colter Corporation's Most Recent Balance Sheet Appear Below