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coldgirl [10]
3 years ago
5

Based on the following data for the current year, what is the inventory turnover? Sales on account during year $700,000 Cost of

merchandise sold during year 270,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000
Business
1 answer:
Elodia [21]3 years ago
3 0

Answer:

2.7

Explanation:

The inventory turnover is defined as the ratio between the cost of merchandise sold during the year and the average inventory.

Average inventory can be defined as the mean between initial and ending inventory. The inventory turnover is:

IT=\frac{\$270,000}{\frac{\$110,000+\$90,000}{2} } \\IT=2.7

The inventory turnover ratio is 2.7.

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Explanation:

Calculation of the amount that Platen should record the purchase.

Using this formula

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