The following balance sheet information is provided for Gaynor Company: Assuming Year 2 cost of goods sold is $153,300, what is the company's inventory turnover?
A) 4.0 times
B) 4.4 times
C) 4.2 times
D) None of these answers is correct.

Question

The following balance sheet information is provided for Gaynor Company:  Assuming Year 2 cost of goods sold is $153,300, what is the company's inventory turnover?
A) 4.0 times 
B) 4.4 times 
C) 4.2 times 
D) None of these answers is correct.

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ [(Beginning inventory + ending inventory) ÷ 2
Inventory turnover = $153,300 ÷ [($35,000 + $38,000) ÷ 2] = $153,300 ÷ $36,500 = 4.2 times

The Following Balance Sheet Information Is Provided for Gaynor Company