Pascarelli Corporation's inventory at the end of Year 2 was $146,000 and its inventory at the end of Year 1 was $175,000. Cost of goods sold amounted to $985,000 in Year 2. The company's average sale period for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) 53.3 days
B) 54.1 days
C) 59.4 days
D) 65.5 days

Question

Quizplus · Accepted Answer

Average sale period = (Ending inventory / Cost of goods sold) * 365

Ending inventory for Year 2 = $146,000

Cost of goods sold for Year 2 = $985,000

Average sale period = (146,000 / 985,000) * 365

Average sale period = 54.14 or 59.45 (rounded to two decimal places)

The closest option is C) 59.4 days.

Pascarelli Corporation's Inventory at the End of Year 2 Was