In: Finance
The following information is available for Sheffield Company at December 31, 2018: beginning inventory $139000; ending inventory $121000; cost of goods sold $845000; and sales $1880000. Sheffield’s inventory turnover in 2018 is 14.5 times. 6.2 times. 6.5 times. 6.9 times.
Information provided:
Beginning inventory= $139,000
Ending inventory= $121,000
Cost of goods sold= $845,000
Sales= $188,000
Inventory turnover is calculated using the below formula:
Inventory Turnover= Cost of Goods Sold/Average Inventory
= $845,000/ ($139,000 + $121,000/2)
= $845,000/ 130,000
= 6.5 times.
Hence, the answer is option c.
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