Question

During 2005, Rand Co. purchased $960,000 of inventory. The cost of goods sold for 2005 was $900,000, and the ending inventory on December 31, 2005 was $180,000. What was the inventory turnover for 2005?

Answer 1

Answer:

Inventory turnover will be 6

Explanation:

We have given purchased cost of inventory = $960000

Cost of goods sold = $900000

Ending inventory is given = $180000

Cost of goods available for sale = $900000+$180000 = $1080000

So beginning inventory = cost of goods available for sale - purchases = $1080000 - $960000 = $120000

So average inventory $=\frac{ending\ inventory+beginning\ inventory}{2}$

$=\frac{180000+120000}{2}=150000$

We have to fond the inventory turnover

Inventory turnover is the ratio of cost of goods sold to average inventory

So inventory turnover $=\frac{900000}{150000}=6$

So inventory turnover will be 6

Answer 2

hey im so bored

Explanation: