The Up-Towner has sales of $913,400, costs of goods sold of $579,300, inventory of $123,900, and accounts receivable of $78,900. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?

Question

Quizplus · Accepted Answer

The formula to calculate days sales in inventory is:

Days sales in inventory = (Inventory / Cost of goods sold) * 365

Substituting the given values:

Days sales in inventory = (123,900 / 579,300) * 365
Days sales in inventory = 0.214 * 365
Days sales in inventory = 78.07 days

Therefore, the answer is choice C, 78.07 days.

The Up-Towner Has Sales of $913,400, Costs of Goods Sold