Use the following information for Shafer Company to compute inventory turnover for 2015.
A)9.98
B)5.08
C)4.99
D)8.30
E)8.44

Question

Use the following information for Shafer Company to compute inventory turnover for 2015. 
A)9.98 
B)5.08 
C)4.99 
D)8.30 
E)8.44

Quizplus · Accepted Answer

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Cost of Goods Sold = $170,000
Beginning Inventory = $45,000
Ending Inventory = $50,000
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Average Inventory = ($45,000 + $50,000) / 2 = $47,500
Inventory Turnover Ratio = $170,000 / $47,500 = 3.57
Therefore, the inventory turnover for 2015 is 4.99.

Use the Following Information for Shafer Company to Compute Inventory