Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900.The inventory turnover for Year 2 is closest to:

A) 3.75
B) 1.20
C) 4.09
D) 0.83

Question

Excerpts from Sydner Corporation's most recent balance sheet appear below:

Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900.The inventory turnover for Year 2 is closest to:

A) 3.75
B) 1.20
C) 4.09
D) 0.83

ashraf thaha · Accepted Answer

Final Answer : C, Explanation :  Inventory turnover = Cost of Goods Sold / Average InventoryWe are given the cost of goods sold for Year 2 as $900. To calculate the average inventory, we need the beginning and ending inventory balances.Beginning inventory = Ending inventory from Year 1 = $1,200Ending inventory = Beginning inventory - Cost of goods sold + Sales = $1,200 - $900 + $1,390 = $1,690Average inventory = (Beginning inventory + Ending inventory) / 2 = ($1,200 + $1,690) / 2 = $1,445Inventory turnover = Cost of Goods Sold / Average Inventory = $900 / $1,445 ≈ 4.09Therefore, the inventory turnover for Year 2 is closest to 4.09, which is option C.

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900.The inventory turnover for Year 2 is closest to:

A) 3.75
B) 1.20
C) 4.09
D) 0.83

Definitions

Learning Objectives

Learning Objectives

Related questions

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900.The inventory turnover for Year 2 is closest to:A) 3.75B) 1.20C) 4.09D) 0.83

Definitions

Learning Objectives

Learning Objectives

Related questions

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900.The inventory turnover for Year 2 is closest to:

A) 3.75
B) 1.20
C) 4.09
D) 0.83