Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. The company's inventory turnover for Year 2 is closest to:

Question

Guttery Corporation has provided the following financial data from its balance sheet:  Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. The company's inventory turnover for Year 2 is closest to:

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ Average inventory*
= $900,000 ÷ $162,000 = 5.56 (rounded)
*Average inventory =
($174,000 + $150,000)÷ 2 = $162,000

Guttery Corporation Has Provided the Following Financial Data from Its