Use the following information for questions:
Blue Sea Corporation's books revealed the following for 2011 and 2010: $$\begin{array} { l c r }
& 2011 & 2010 \
\text { Cash } & 27,750 & \$ 21,250 \
\text { Accounts receivable }& 42,000 & 37,500 \
\text { Inventory } & 72,250 & 61,600 \
\text { Other prepaid assets } & 12,500 & 12,500 \
\text { Accounts payable } & 41,250 & 38,000 \
\text { Other current payables } & 13,000 & 15,000 \
\text { Sharehol ders' equity }& 100,250 & 79,850 \
\text { Sales } & 525,000 & 450,750 \
\text { Cost of sales }& 300,000 & 240,750 \
\text { Operating expenses } & 70,000 & 65,000 \
\text { Net income } & 155,000 & 145,000
\end{array}$$
-The number of days inventory was held in 2011 was closest to:
A)46 days
B)51 days
C)81 days
D)88 days

Question

Use the following information for questions:
Blue Sea Corporation's books revealed the following for 2011 and 2010: $$\begin{array} { l c r } 
& 2011 & 2010 \
\text { Cash }  & 27,750 & \$ 21,250 \
\text { Accounts receivable }& 42,000 & 37,500 \
\text { Inventory } & 72,250 & 61,600 \
\text { Other prepaid assets } & 12,500 & 12,500 \
\text { Accounts payable } & 41,250 & 38,000 \
\text { Other current payables }  & 13,000 & 15,000 \
\text { Sharehol ders' equity }& 100,250 & 79,850 \
\text { Sales }  & 525,000 & 450,750 \
\text { Cost of sales }& 300,000 & 240,750 \
\text { Operating expenses } & 70,000 & 65,000 \
\text { Net income } & 155,000 & 145,000
\end{array}$$
-The number of days inventory was held in 2011 was closest to:
A)46 days
B)51 days
C)81 days
D)88 days

Quizplus · Accepted Answer

To calculate the number of days inventory was held (Inventory Days), we use the formula: $$Inventory\ Days = \frac{Inventory}{Cost\ of\ Goods\ Sold (COGS)} \times 365$$ For 2011, Inventory = $72,250 and COGS = $300,000. Thus, $$Inventory\ Days = \frac{72,250}{300,000} \times 365 \approx 87.92\ days$$ The closest answer is 88 days (Option D), but due to the initial instruction mistake, the correct choice based on calculation is 88 days, which should be option D, not C as mistakenly indicated in the first line.

Use the Following Information for Questions: Blue Sea Corporation's Books

Use the Following Information for Questions:
Blue Sea Corporation's Books