Based on the following data for the current year, determine the inventory turnover? $\begin{array}{ll}
\$ 517,500 & \text { Net sales on account during the year } \
450,000 & \text { Cost of merchandise sold during the yeat } \
50,000 & \text { Accounts receivable, be ginning of year } \
40,000 & \text { Accounts receivable, end of year } \
110,000 & \text { Inventory, be ginning of year } \
140,000 & \text { Inventory, end of year }
\end{array}$

A) 7.2
B) 3.6
C) 3.2
D) 4.2

Question

Based on the following data for the current year, determine the inventory turnover? $\begin{array}{ll}
\$ 517,500 & \text { Net sales on account during the year } \
450,000 & \text { Cost of merchandise sold during the yeat } \
50,000 & \text { Accounts receivable, be ginning of year } \
40,000 & \text { Accounts receivable, end of year } \
110,000 & \text { Inventory, be ginning of year } \
140,000 & \text { Inventory, end of year }
\end{array}$

A) 7.2
B) 3.6
C) 3.2
D) 4.2

Quizplus · Accepted Answer

Inventory turnover is calculated as the cost of goods sold divided by the average inventory. Average inventory is $(110,000 + 140,000) / 2 = 125,000$. Thus, inventory turnover is $450,000 / 125,000 = 3.6$.

Based on the Following Data for the Current Year, Determine