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sweet [91]
3 years ago
10

ABC's beginning inventory is $2,000 and its ending inventory is $1,000. The inventory turnover is 6 times. Cost of goods sold fo

r the year must equal:
Business
1 answer:
mojhsa [17]3 years ago
7 0

Answer:

$9000

Explanation:

Inventory turnover is an example of an activity ratio

Activity ratios calculate the efficiency of performing daily task of a firm

Inventory turnover = cost of goods sold / average inventory

Average inventory = (beginning inventory + ending inventory) / 2

($2000 + $1000) / 2 = $1500

6 = cost of goods sold / 1500

To determine cost of goods sold, multiply both sides of the equation by 1500

1500 x 6 = $9000 = cost of goods sold

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