Lambert's Auto Mart had a beginning inventory of $1,400,800, purchases of $3,001,300, and an ending inventory of $1,600,500. Compute the inventory turnover when inventory and purchases are at retail.
Lambert's Auto Mart had a beginning inventory of $1,400,800, purchases of $3,001,300, and an ending inventory of $1,600,500. Compute the inventory turnover when inventory and purchases are at retail.
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
Lambert's Auto Mart had a beginning inventory of $1,400,800, purchases of $3,001,300, and an ending inventory of $1,600,500. Compute the inventory turnover when inventory and purchases are at retail.
Expert Solution
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Step 1
Inventory turnover = Cost of goods sold / Average inventory
where,
Average inventory = (beginning inventory + ending inventory ) / 2
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