Question

The following information was available for Swifty Corporation at December 31, 2022: beginning inventory $89000; ending inventory $128000; cost of goods sold $604000; and sales $992000. Swifty inventory turnover ratio in 2022 was:____.a. 9.2 times. b. 10.0 times. c. 6.0 times. d. 7.2 times.

Answer 1

Answer:

c. 6.0 times.

Explanation:

The computation of the inventory turnover ratio is shown below:

As we know that

Inventory turnover ratio is

= Cost of goods sold ÷ average inventory

= $604,000 ÷ ($89,000 + $128,000) ÷ 2

= $604,000 ÷ $108,500

= 5.57 times

= 6 times

Hence, the inventory turnover ratio of Swifty is 6.0 times

Therefore the correct option is c.

We simply applied the above formula so that the correct value could come

And, the same is to be considered