Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The inventory turnover for Year 2 is closest to:

Question

Excerpts from Sydner Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The inventory turnover for Year 2 is closest to:

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ Average inventory balance
= $900 ÷ $220* = 4.09 (rounded)
*Average inventory balance = ($240 + $200)÷ 2 = $220

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