Excerpts from Zorra Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,370 and the cost of goods sold was $850.
-The inventory turnover for Year 2 is closest to:
A)4.05
B)4.36
C)1.17
D)0.86

Question

Excerpts from Zorra Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,370 and the cost of goods sold was $850.
-The inventory turnover for Year 2 is closest to:
A)4.05 
B)4.36 
C)1.17 
D)0.86

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold F1F1F1S1F1F1F10 Average inventory balance
= $850 F1F1F1S1F1F1F10 $195* = 4.36
*Average inventory balance = ($210 + $180)F1F1F1S1F1F1F10 2 = $195

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