Question

What’s the answer to this question for accounting?

Answer 1

Answer:

• The inventory turnover for the year is      10     .

Explanation:

The inventory turn over for a year is the number of times the inventory has been sold over the year:

        $\text{Inventory turn over }=\dfrac{\text{Cost of goods sold}}{\text{Average inventory}}$

The average inventory is:

      $\text{Average inventory }=\dfrac{\text{Beginning inventory + Ending inventory}}{2}$

Thus, from the financial data in the table for The Tampa Manufacturing Company, at Decermber 31, the inventory turnover for the year is:

     $\text{Average inventory }=\dfrac{\text{\ 55,000 + \ 45,000}}{2}=\ 50,000$

     $\text{Inventory turn over }=\dfrac{\text{\ 500,000}}{\text{\ 50,000}}=10$