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A small firm has a beginning inventory of $52,000 as of January 1, 2020, and the following accounting information. Month Ending Inventory Cost of Goods
- A small firm has a beginning inventory of $52,000 as of January 1, 2020, and the following accounting information.
| Month | Ending Inventory | Cost of Goods Sold |
| January 2020 | $75,000 | $225,000 |
| February 2020 | $56,000 | $325,000 |
| March 2020 | $25,000 | $240,000 |
| April 2020 | $85,000 | $325,000 |
| May 2020 | $125,000 | $460,000 |
| June 2020 | $95,000 | $220,000 |
| July 2020 | $72,000 | $85,000 |
| August 2020 | $45,000 | $156,000 |
| September 2020 | $52,500 | $220,000 |
| October 2020 | $120,000 | $265,000 |
| November 2020 | $162,500 | $100,000 |
| December 2020 | $255,000 | $350,000 |
- Compute the monthly inventory turnover ratio for each of the twelve months.
- What are the annual cost of goods sold and the average inventory for the year?
- Compute the annual inventory turnover ratio. What can the purchasing department do to improve the firms performance?
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