Refer to the Following Selected Financial Information from Graceworks Corp

question 127

Multiple Choice

Refer to the following selected financial information from Graceworks Corp. Compute the company's inventory turnover for Year 2. $$\begin{array} { | l | r | r | } \hline & \text { Year 2 } & \text { Year 1 } \\\hline \text { Merchandise inventory } & 271,000 & 253,500 \\\hline \text { Cost of goods sold } & 486,400 & 433,100 \\\hline\end{array}$$

• A) 1.79.
• B) 1.71.
• C) 1.85.
• D) 0.93.
• E) 1.75.

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Definitions:

Liabilities

Liabilities are financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Reversing Entry

An accounting entry that is made at the beginning of an accounting period to reverse or cancel out a previously made adjusting entry.

Salaries Expense

The total amount of salary payments owed to employees for work performed during a specific period.

Salaries Payable

An account that records amounts owed to employees for work performed but not yet paid, a liability on the balance sheet.