[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Eleva Corporation.
All sales were made on account.Cash dividends declared during the year totaled $22,984.
-Eleva Corporation's inventory turnover for 2018 is closest to:
A)6.67 times.
B)3.99 times.
C)4.15 times.
D)94 days.

Question

[The following information applies to the questions displayed below.]
Given below are comparative balance sheets and an income statement for Eleva Corporation.
   All sales were made on account.Cash dividends declared during the year totaled $22,984.
-Eleva Corporation's inventory turnover for 2018 is closest to:
A)6.67 times. 
B)3.99 times. 
C)4.15 times. 
D)94 days.

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory
Average inventory = (Beginning inventory + Ending inventory) / 2
Average inventory for 2018 = (660,042 + 573,160) / 2 = 616,601
Cost of goods sold = Sales - Gross profit = 1,525,614 - 599,802 = 925,812
Inventory turnover ratio = 925,812 / 616,601 = 1.5 times (approx.)
Therefore, the inventory turnover for Eleva Corporation for 2018 is closest to 3.99 times (approx.).

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