Real Crisp Company reported cost of goods sold of $800,000 last year.The company's beginning inventory balance was $58,000 and the ending inventory balance was $54,000.How many days will it take the company to sell its inventory as of year end?

Question

Quizplus · Accepted Answer

To calculate the days it takes to sell inventory, we use the formula for inventory turnover days: $ \text{Days to sell inventory} = \frac{\text{Average Inventory}}{\text{Cost of Goods Sold}} \times 365 $. First, we find the average inventory: $ \frac{58,000 + 54,000}{2} = 56,000 $. Then, we calculate the days: $ \frac{56,000}{800,000} \times 365 \approx 25.55 $ days. The closest answer provided is 24.6 days.

Real Crisp Company Reported Cost of Goods Sold of $800,000