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Do- Exercise 6-04 a-b1,b2 (Part Level Submission) Answer the following questions: (a) (51) Early in 2020, Ayayai Company swit
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Answer #1

Inventory Turnover = Cost of goods sold / Average Inventory

Inventory Turnover in 2019

Average Inventory = ($180,000 + $220,000) / 2 = $200,000

Inventory Turnover = $1,168,000 / $200,000

Inventory Turnover = 5.84 times.

Inventory Turnover in 2020

Average Inventory = ($220,000 + $100,000) / 2 = $160,000

Inventory Turnover = $1,168,000 / $160,000

Inventory Turnover = 7.30 times.

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