Tinkers cost of goods sold in the year of sale 2016 was 8500

Tinker’s cost of goods sold in the year of sale (2016) was $850,000 and 2015 cost of goods sold was $870,000. The inventory at the end of 2016 was $198,000 and at the end of 2015 the inventory was $218,000. Tinker’s inventory turnover during 2016 was closest to:

Solution

Inventory turnover = Costs of goods sold/Average Inventory = $       8,50,000 / $       2,08,000 = 4.09 Working: Costs of goods sold for 2016           8,50,000 Average inventory for 2016 (198000+218000)/2 = 2,08,000