Irappa Company,a retailer,had cost of goods sold of $170,000 last year.The beginning inventory balance was $28,000 and the ending inventory balance was $26,000.The company's average sale period (turnover in days)was closest to:

Question

Quizplus · Accepted Answer

To calculate the average sale period (turnover in days), we can use the following formula:

Average sale period = (Inventory / Cost of goods sold) x 365

First, we need to find the average inventory balance for the year, which is the average of the beginning and ending inventory balances:

Average inventory = (Beginning inventory + Ending inventory) / 2
= ($28,000 + $26,000) / 2
= $27,000

Now we can plug in the values we have into the formula:

Average sale period = ($27,000 / $170,000) x 365
= 58.01 days (rounded to two decimal places)

So the closest answer is B) 57.97 days.

Irappa Company,a Retailer,had Cost of Goods Sold of $170,000 Last