Based on the following data for the current year, what is the number of days' sales in inventory? Sales on account during year
$1,204,500
Cost of merchandise sold during year
657,000
Accounts receivable, beginning of year
75,000
Accounts receivable, end of year
85,000
Inventory, beginning of year
85,600
Inventory, end of year
A) 51.2 98,600
B) 44.4
C) 6.5
D) 7.5

Question

Quizplus · Accepted Answer

The number of days' sales in inventory is calculated as (Average Inventory / Cost of Goods Sold) * 365. The average inventory is (85,600 + 98,600) / 2 = 92,100. Thus, (92,100 / 657,000) * 365 = 51.2 days.

Based on the Following Data for the Current Year, What