Question

The following accounting data is used for questions 8 and 9:

Assets Inventory $530,000
Property, plant & equipment $500,000
Other assets $140,000
Total assets $1,170,000
Condensed Income Statement Revenue $2,000,000
Cost of goods sold $700,000
Other expenses $1,000,000
Net income $300,000

Using the above data pulled from a recent Walsh Manufacturing annual report, Walsh’s percentage invested in inventory is closest to:

Answer 1

Answer:

Explanation:

Walsh’s percentage invested in inventory is closest to the result of the amount invested in inventory divided by the total asset then expressed as a percentage.

Mathematically,

percentage invested in inventory = Inventory balance/ total assets * 100%

This is

= $530,000/$1,170,000 * 100%

= 45.3%