Question

Gamble Corporation had beginning inventory $100,000, cost of goods purchased $700,000, and ending inventory $140,000. What was Gamble's inventory turnover? Group of answer choices 5 times. 5.5 times. 5.83 times. 6.6 times.

Answer 1

5.83 times

Step-by-step explanation:

The computation of the Gamble's inventory turnover is given below:

As we know that

Inventory turnover = Cost of goods sold ÷ (ending inventory + opening inventory) ÷ 2

= $700,000 ÷ ($140,000 + $100,000) ÷ 2

= $700,000 ÷ $120,000

= 5.83 times