Use the following information to answer the next ten questions:
Excerpts from TPX Company's December 31,2015 and 2014,financial statements are presented below:

-TPX Company's 2015 inventory turnover is:
A)3.0 times.
B)5.2 times.
C)3.3 times.
D)3.6 times.

Question

Use the following information to answer the next ten questions:
Excerpts from TPX Company's December 31,2015 and 2014,financial statements are presented below:
 
-TPX Company's 2015 inventory turnover is:
A)3.0 times. 
B)5.2 times. 
C)3.3 times. 
D)3.6 times.

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory
Average inventory = (Beginning inventory + Ending inventory) / 2

For 2015:
Cost of goods sold = $925,000
Beginning inventory = $311,000
Ending inventory = $339,000

Average inventory = ($311,000 + $339,000) / 2 = $325,000

Inventory turnover ratio = $925,000 / $325,000 = 2.846 = 3.3 times (rounded)

Use the Following Information to Answer the Next Ten Questions