Question

Selected financial information for Solomon Company for 2019 follows:

Answer 1

Answer:

9.89 times

Explanation:

Calculation to determine the merchandise inventory turn over during 2019

First step is calculate the Average Inventory using this formula

Average Inventory = (Opening Inventory + Closing Inventory) / 2

Let plug in the formula

Average Inventory= (154,000 + 200,000) / 2

Average Inventory= 354,000 / 2

Average Inventory= 177,000

Now let determine the Merchandise Inventory Turnover using this formula

Merchandise Inventory Turnover = Cost of goods sold/ Average Inventory

Let plug in the formula

Merchandise Inventory Turnover= 1,750,000 / 177,000

Merchandise Inventory Turnover= 9.89 times

Therefore Assuming that the merchandise inventory buildup was relatively constant, the merchandise inventory turn over during 2019 is 9.89 times