The following information was available for Pete Company at December 31, 2018: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $984,000; and sales $1,350,000. Pete's inventory turnover in 2018 was
A) 10.9 times.
B) 12.3 times.
C) 14.1 times.
D) 16.9 times.

Question

Quizplus · Accepted Answer

Inventory Turnover = Cost of Goods Sold / Average Inventory

Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Average Inventory = ($90,000 + $70,000) / 2
Average Inventory = $80,000

Inventory Turnover = $984,000 / $80,000
Inventory Turnover = 12.3 times.

Therefore, the answer is choice letter B.

The Following Information Was Available for Pete Company at December