Question

Suppose Kendall's had cost of goods sold during the year of $ 260 comma 000. Beginning merchandise inventory was $ 20 comma 000​, and ending merchandise inventory was $ 35 comma 000. Determine Kendall's inventory turnover for the year. Round to the nearest hundredth.

Answer 1

Inventory turnover = 9.45

Step-by-step explanation:

Inventory turnover is defined as the ratio between Cost of good sold and average inventory.

Average inventory is defined as follows, where BI = Beginning merchandise inventory and EI = Ending merchandise inventory:

`Average Inventory = (BI + EI)/(2)`

`Average Inventory=(20000+35000)/(2)=27500`

then:

`Turnover = (260000)/(27500) \\Turnover = 9.45`