Anthony Thomas Candies (ATC) reported the following financial data for 2016 and
ID: 2448592 • Letter: A
Question
Anthony Thomas Candies (ATC) reported the following financial data for 2016 and 2015:
9,000
6,000
$305,000
$283,000
150,000
129,000
66,000
61,000
145,000
86,000
$160,000
$197,000
None of these is correct.
2.28.
2.20.
4.39.
2016 2015 Sales $314,000 $289,000 Sales returns and allowances9,000
6,000
Net sales$305,000
$283,000
Cost of goods sold: Inventory, January 1 61,000 18,000 Net purchases150,000
129,000
Goods available for sale 211,000 147,000 Inventory, December 3166,000
61,000
Cost of goods sold145,000
86,000
Gross profit$160,000
$197,000
Explanation / Answer
ATC's inventory turnover ratio is $2.28
Inventory turnover ratio = cost of goods sold/ average inventory
Average inventory = (66,000 +61,000)/2
= $63,500
Turnvoer ratio = $145,000/63,500
= 2.28
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