Thomas Company provided the following particulars for year 2017:
$$\begin{array} { | l | l | }
\hline \text { Cost of sales } & \$ 1,100,000 \
\hline \text { Beginning inventory } & 340,000 \
\hline \text { Ending inventory } & 350,000 \
\hline
\end{array}$$
Calculate Thomas's rate of inventory turnover for the year.(Round your answer to two decimal places.)
A) 3.14 times per year
B) 3.19 times per year
C) 1.59 times per year
D) 3.24 times per year

Question

Thomas Company provided the following particulars for year 2017:
$$\begin{array} { | l | l | } 
\hline \text { Cost of sales } & \$ 1,100,000 \
\hline \text { Beginning inventory } & 340,000 \
\hline \text { Ending inventory } & 350,000 \
\hline
\end{array}$$
Calculate Thomas's rate of inventory turnover for the year.(Round your answer to two decimal places.)
A) 3.14 times per year
B) 3.19 times per year
C) 1.59 times per year
D) 3.24 times per year

Quizplus · Accepted Answer

The rate of inventory turnover is calculated by dividing the cost of goods sold by the average inventory. Using the information given, we have: 
Cost of goods sold = $350,000 
Average inventory = ($45,000 + $60,000)/2 = $52,500 
Inventory turnover = $350,000 ÷ $52,500 = 6.67 times per year 
Therefore, the answer is not one of the options provided.

Thomas Company Provided the Following Particulars for Year 2017 Calculate Thomas's Rate of Inventory Turnover for the Year