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6 April, 23:41

Selected data pertaining to Lore Co. for the calendar year 20X4 is as follows: Net cash sales $3,000 Cost of goods sold $18,000 Inventory at beginning of year $6,000 Purchases $24,000 Accounts receivable at beginning of year $20,000 Accounts receivable at end of year $22,000 What was the inventory turnover for 20X4?

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  1. 6 April, 23:54
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    The answer is: The inventory turnover for 20x4 was 2 times

    Explanation:

    In order to find the inventory turnover we must first calculate the ending inventory:

    COGS = beginning inventory + purchases - ending inventory

    $18,000 = $6,000 + $24,000 - ending inventory

    ending inventory = $30,000 - $18,000 = $12,000

    Inventory turnover = COGS / Average inventory

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

    Inventory turnover = $18,000 / [ ($6,000 + $12,000) / 2] = $18,000 / $9,000

    Inventory turnover = 2
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