Use the following information to answer the question below Use the following information to answer the question below Opening stock---------2,300 Purchases-...

Answer Details

To calculate the rate of stock turnover, we need to use the following formula: Stock Turnover Ratio = Cost of Goods Sold / Average Stock We are given the following information: - Opening stock = 2,300 - Purchases = 11,874 - Sales = 18,600 - Closing stock = 3,600 - Cost of goods sold = 11,500 To calculate the average stock, we can use the following formula: Average Stock = (Opening Stock + Closing Stock) / 2 Plugging in the values, we get: Average Stock = (2,300 + 3,600) / 2 Average Stock = 2,950 Now we can calculate the stock turnover ratio: Stock Turnover Ratio = Cost of Goods Sold / Average Stock Stock Turnover Ratio = 11,500 / 2,950 Stock Turnover Ratio = 3.898 This means that the stock was turned over 3.898 times during the given period. However, it is usually expressed as a whole number, so we can round it to the nearest whole number. Therefore, the answer is 4 times. In simpler terms, this means that the company sold and replaced its entire stock 4 times during the given period.