Turnbull Department Store had net credit sales of $18000000 and cost of goods sold of $15000000 for the year. The average inventory for the year amounted to $2500000. The average number of days in inventory during the year was
A) 365 days.
B) 60.8 days.
C) 50.7 days.
D) 30 days.

Question

Quizplus · Accepted Answer

Inventory turnover ratio = Cost of goods sold / Average inventory
Inventory turnover in days = 365 days / Inventory turnover ratio

Inventory turnover ratio = $15,000,000 / $2,500,000 = 6 times
Inventory turnover in days = 365 days / 6 times = 60.8 days

Therefore, the average number of days in inventory during the year was 60.8 days, which is option B.

Turnbull Department Store Had Net Credit Sales of $18000000 and Cost