Asked by Charlease Jordan on Jul 09, 2024
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The following information is available for Oakland Company: 20172016 Accounts receivable $360,000$400,000 Inventory 340,000400,000 Net credit sales 2,470,0001,400,000 Cost of goods sold 1,850,0001,060,000 Net income 300,000170,000\begin{array}{lrr}&2017&2016\\\text { Accounts receivable } & \$ 360,000 & \$ 400,000 \\\text { Inventory } & 340,000 & 400,000 \\\text { Net credit sales } & 2,470,000 & 1,400,000 \\\text { Cost of goods sold } & 1,850,000 & 1,060,000 \\\text { Net income } & 300,000 & 170,000\end{array} Accounts receivable Inventory Net credit sales Cost of goods sold Net income 2017$360,000340,0002,470,0001,850,000300,0002016$400,000400,0001,400,0001,060,000170,000 The inventory turnover ratio for 2017 is
A) 6.7 times.
B) 5.0 times.
C) 5.4 times.
D) 4.6 times.
Inventory Turnover
A ratio showing how many times a company's inventory is sold and replaced over a specific period.
Inventory
Inventory refers to the goods and materials that a business holds for the ultimate goal of resale or processing.
Cost Of Goods Sold
Financial obligations directly arising from the manufacturing of a company’s products, including material and labor costs.
- Comprehend the inventory and accounts receivable turnover ratios for assessing the effectiveness of a company's management of its stock and collection of receivables.
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Learning Objectives
- Comprehend the inventory and accounts receivable turnover ratios for assessing the effectiveness of a company's management of its stock and collection of receivables.
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