Cap It All cap shop has an inventory turnover ratio of 5.0, $1.25 million in annual sales, and $500,000 cost of goods sold for the same annual period. What is its average inventory? a. $50,000 b. $100,000 c. $125,000 d. $150,000

Cap It All cap shop has an inventory turnover ratio of 5.0, $1.25 million in annual sales, and $500,000 cost of goods sold for the same annual period. What is its average inventory? a. $50,000 b. $100,000 c. $125,000 d. $150,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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Question

I am searching for the accurate solution to this general accounting problem with the right approach.

Cap It All cap shop has an inventory turnover
ratio of 5.0, $1.25 million in annual sales, and
$500,000 cost of goods sold for the same
annual period. What is its average inventory?
a. $50,000
b. $100,000
c. $125,000
d. $150,000

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