Question

The following information is available for Coronado Company:

	2020	2019
Accounts receivable (net)	$   340000	$   380000
Inventory	330000	390000
Net credit sales	2410000	1450000
Cost of goods sold	2124000	1000000
Net income	350000	150000

The inventory turnover ratio for 2020 is

Answer 1

Ans - 5.9 times

Inventory turnover ratio for 2020 = (Cost of Goods solf of 2020 / Average inventory)
Cost of goods sold = $2124000
Average inventory = [(Inventory of 2019 + Inventory of 2020) / 2]
=> [($390000 + $330000) / 2]
=> $360000

So, Inventory turnover ratio = ($2124000 / $360000)
=> 5.9 times (Ans)

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