The following information is available for Park Company at December 31, 2010: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $900,000; and sales $1,200,000. Park's inventory turnover in 2010 is
A) 12 times.
B) 11.3 times.
C) 9 times.
D) 7.5 times.

Question

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold / Average inventory
Average inventory = (Beginning inventory + Ending inventory) / 2
Average inventory = ($80,000 + $120,000) / 2 = $100,000

Inventory turnover = $900,000 / $100,000 = 9 times

The Following Information Is Available for Park Company at December