Question

Early in 2022, Pina Company switched to a just-in-time inventory system. Its sales revenue, cost of goods sold, and inventory amounts for 2021 and 2022 are shown below.

Answer 1

The Inventory Turnover for 2021 is 5.9 times and for 2022 is 10 times.

Inventory turnover

2021

Inventory Turnover = Cost of Goods sold / Average Inventory

Cost of Goods sold = $1,165,250/[($170,000+$225,000)/2]

Cost of Goods sold = $1,165,250/($395,000/2)

Cost of Goods sold = $1,165,250/197,500

Cost of Goods sold = 5.9 times

2022

Inventory Turnover = Cost of Goods sold / Average Inventory

Cost of Goods sold = $1,525,000/[($225,000+$80,000)/2]

Cost of Goods sold =  $1,525,000/($305,000/2)

Cost of Goods sold =  $1,525,000/152,500

Cost of Goods sold = 10 times

Therefore the Inventory Turnover for 2021 is 5.9 times and for 2022 is 10 times.

Learn more about  Inventory Turnover here:brainly.com/question/12942515

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The complete question is:

Pina Colada Corp. switched to a just-in-time inventory system. Its sales and Inventory amounts for 2021 and 2022 are shown below.

                                 2021            2022

Sales revenue $3,360,000  $3,900,000

Cost of goods sold  1,165,250 1,525,000

Beginning inventory  170,000 225,000

Ending inventory        225,000  80,000

Determine the inventory turnover for 2021 and 2022.