Question

The following information is available for Crane Company at December 31, 2018:

Beginning inventory $50000;
Ending inventory $110000;
Cost of goods sold $480000;
Sales $1650000.

Crane’s inventory turnover in 2018 is:_________

Answer 1

The inventory was sold and replaced 6 times in the period.

Step-by-step explanation:

Giving the following information:

Beginning inventory $50000;

Ending inventory $110000;

Cost of goods sold $480000

Inventory turnover is the number of times that the company replaced its inventory in a time.

The formula is as follow:

Inventory turnover= cost of goods sold/ average inventory

Average inventory= (beginning inventory + ending inventory)/2

Inventory turnover= 480,000 / [(50,000 + 110,000)/2]= 6

The inventory was sold and replaced 6 times in the period.