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10 December, 01:56

Jim had a beginning inventory of $5,500. During the month of April, he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month. His sales for April were $8,750. What was his inventory turnover?

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  1. 10 December, 02:25
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    1.23

    Explanation:

    Inventory turnover is a ratio showing how many times a company has sold and replaced inventory during a given period.

    Cost of Sales=Opening Inventory+Purchases-Closing Inventory

    =5,500+4,000-3,800 = 5,700

    Average Inventory = Opening + Closing/2

    = 5,500+3,800/2 = 4,650

    Inventory Turnover Ratio = Cost of Sales

    Avg Inventory

    = 5,700/4,650=1.23
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