Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

A) 0.92
B) 6.50
C) 1.08
D) 6.24

Question

Freiman Corporation's most recent balance sheet and income statement appear below:   The inventory turnover for Year 2 is closest to:A)  0.92B)  6.50C)  1.08D)  6.24

ADITI GHOSH · Accepted Answer

Final Answer : D, Explanation :  Inventory turnover = Cost of goods sold / Average inventoryFor Year 2:Cost of goods sold = $740,000Average inventory = ($60,000 + $72,000) / 2 = $66,000Inventory turnover = $740,000 / $66,000 = 11.21Round off to the nearest whole number, the inventory turnover for Year 2 is 11.Therefore, the closest answer choice is D, which is 6.24, as 6.24 is the nearest value to 11 when rounded to two decimal places.

Freiman Corporation's most recent balance sheet and income statement appear below: The inventory turnover for Year 2 is closest to:

A) 0.92
B) 6.50
C) 1.08
D) 6.24

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