Question

P palace provided the following information: Ending inventory, previous period Ending inventory, current period Sales, previous period Sales, current period $95,500 $105,500 $450.550 $540,450 Determine the inventory turnover for current period, assuming that gross profit for current year is $195,405. Answer Choices: a. 3.43 times b. 2.99 times c. 3.27 times d. 3.61 times A Answer​

Answer 1

Explanation:

Inventory turnover ratio = Cost of goods sold ( WN 1)

----------------------------------------

Average inventory (WN 2)

= 3,60,000

-----------------

90,000

= 4 Times

Working notes:-

1) Cost of goods sold = Gross sales - (Sales return + gross profit)

= 5,00,000 - (50,000 + 90,000)

= 3,60,000.

2) Average Inventory = 1,00,000 + 80,000

-------------------------------

2

= 90,000.

Closing inventory is 20,000 more than opening inventory hence opening inventory is 1,00,000 - 20,000 = 80,000.

Answer 2

Answer:

Hi hope this helps you have a great day ahead

Explanation:

Inventory turnover ratio = Cost of goods sold ( WN 1)

----------------------------------------

Average inventory (WN 2)

= 3,60,000

-----------------

90,000

= 4 Times

Working notes:-

1) Cost of goods sold = Gross sales - (Sales return + gross profit)

= 5,00,000 - (50,000 + 90,000)

= 3,60,000.

2) Average Inventory = 1,00,000 + 80,000

-------------------------------

2

= 90,000.

Closing inventory is 20,000 more than opening inventory hence opening inventory is 1,00,000 - 20,000 = 80,000.