**Inventory Turnover Calculation**Given the data:- Net sales: $40,000- Beginning inventory at retail: $14,000- Ending inventory at retail: $20,000- Cost of goods sold (COGS): $19,500**Problem:**Calculate the inventory turnover at retail to the nearest hundredth.**Multiple Choice Options:**- 5.15- 3.25- 2.35- 5.23- None of the answer choices are correct.**Explanation:**The inventory turnover ratio is generally calculated as:\[ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold (COGS)}}{\text{Average Inventory}} \]The average inventory is calculated as:\[ \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2} \]Substituting the given values:\[ \text{Average Inventory} = \frac{14,000 + 20,000}{2} = 17,000 \]The inventory turnover ratio is:\[ \text{Inventory Turnover} = \frac{19,500}{17,000} \approx 1.15 \]Since this value does not appear in the given options, the correct answer would be:- None of the answer choices are correct.

Given, Beginning inventory = $14,000 Ending inventory = $20,000 Net sales = $40,000

With net sales of $40,000, beginning inventory at retail of $14,000, ending inventory at retail of $20,000, and cost of goods sold of $19,500, the inventory turnover at retail is (to the nearest hundredth): Multiple Choice O O O O 5.15 3.25 2.35 5.23 None of the answer choices are correct.

With net sales of $40,000, beginning inventory at retail of $14,000, ending inventory at retail of $20,000, and cost of goods sold of $19,500, the inventory turnover at retail is (to the nearest hundredth): Multiple Choice O O O O 5.15 3.25 2.35 5.23 None of the answer choices are correct.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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