Question

The following information is available for Tye Company at December 31: Beginning inventory $80,000; Ending inventory $120,000; Cost of goods sold $1,200,000; and Sales revenue $1,600,000. Tye’s inventory turnover is ________ times.

Answer 1

=12 times

Step-by-step explanation:

Inventory turnover ratio =cost of goods sold/ average inventory

Average inventory = opening inventory + closing inventory/2

Cost of goods sold= $ 1,200.000.00

Calculating Average inventory = $80,000 + $120,000/2

=$200,000/2

= $100,000

Inventory ratio =$ 1,2000.000/$ 100,000.00

=12 times