Selected information from the accounting records of Ellison Manufacturing follows:

What is the number of days' sales in average inventories for the year?
A) 102.2
B) 94.9
C) 87.6
D) 68.1

Question

Selected information from the accounting records of Ellison Manufacturing follows:

What is the number of days' sales in average inventories for the year?
A) 102.2 
B) 94.9 
C) 87.6 
D) 68.1

Quizplus · Accepted Answer

Days' Sales in Average Inventory = (Average Inventory / Cost of Goods Sold) x 365
= ($3,350 + $3,150) / 2 / $15,200 x 365
= 85.05
Therefore, the correct answer is B) 94.9 (rounded to one decimal place).

Selected Information from the Accounting Records of Ellison Manufacturing Follows