Consider the following inventory data:
$$\begin{array} { l r }
\text { Beginning inventory } & \$ 150,000 \
\text { Ending inventory } & 100,000 \
\text { Purchases } & 310,000
\end{array}$$
What is the average days in inventory for the year?

Question

Consider the following inventory data: 
$$\begin{array} { l r } 
\text { Beginning inventory } & \$ 150,000 \
\text { Ending inventory } & 100,000 \
\text { Purchases } & 310,000
\end{array}$$
What is the average days in inventory for the year?

Quizplus · Accepted Answer

The average inventory is $(150,000 + 100,000) / 2 = 125,000$. The cost of goods sold (COGS) is $150,000 + 310,000 - 100,000 = 360,000$. The inventory turnover ratio is $360,000 / 125,000 = 2.88$. The average days in inventory is $365 / 2.88 = 126.7$ days.

Consider the Following Inventory Data What Is the Average Days in Inventory for the Year