Crue Company's merchandise inventory and other related accounts for 2014 follow: Sales $ 3 , 937 , 500 Cost of goods sold 2 , 756 , 250 Merchandise inventory: Beginning of year 750 , 000 End of year 825 , 000 \begin{array} { l r } ext { Sales } & \$ 3,937,500 \ ext { Cost of goods sold } & 2,756,250 \ ext { Merchandise inventory: } & \ ext { Beginning of year } & 750,000 \ ext { End of year } & 825,000\end{array} Sales Cost of goods sold Merchandise inventory: Beginning of year End of year $3 , 937 , 500 2 , 756 , 250 750 , 000 825 , 000 Required:Calculate Crue's inventory turnover during 2014 assuming that the merchandise inventory buildup was relatively constant during the year.

Question

Crue Company's merchandise inventory and other related accounts for 2014 follow:  Sales  $ 3 , 937 , 500  Cost of goods sold  2 , 756 , 250  Merchandise inventory:   Beginning of year  750 , 000  End of year  825 , 000 \begin{array} { l r } 	ext { Sales }  &  \$ 3,937,500 \	ext { Cost of goods sold }  &  2,756,250 \	ext { Merchandise inventory: }  &  \	ext { Beginning of year }  &  750,000 \	ext { End of year }  &  825,000\end{array}  Sales   Cost of goods sold   Merchandise inventory:   Beginning of year   End of year  ​ $3 , 937 , 500 2 , 756 , 250 750 , 000 825 , 000 ​ Required:Calculate Crue's inventory turnover during 2014 assuming that the merchandise inventory buildup was relatively constant during the year.

Reagan Townsend · Accepted Answer

Final Answer : 3.5 timesFeedback:Average inventory = ($750,000 + $825,000)÷ 2 = $787,500Inventory turnover = Cost of goods sold ÷ Average inventory = $2,756,250 ÷ $787,500 = 3.5 times

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