Irally Company,a retailer,had cost of goods sold of $150,000 last year.The beginning inventory balance was $26,000 and the ending inventory balance was $24,000.The company's average sale period (turnover in days)was closest to:

Question

Quizplus · Accepted Answer

First, we need to find out the cost of goods available for sale:

Beginning inventory + Cost of goods sold - Ending inventory = 
$26,000 + $150,000 - $24,000 = $152,000

Then, we can use the formula for average sale period (also known as inventory turnover in days):

Average sale period = 365 days / Inventory turnover ratio

Inventory turnover ratio = Cost of goods sold / Average inventory

To find the average inventory, we can use the following formula:

Average inventory = (Beginning inventory + Ending inventory) / 2

Average inventory = ($26,000 + $24,000) / 2 = $25,000

Now we can calculate the inventory turnover ratio:

Inventory turnover ratio = $150,000 / $25,000 = 6

Finally, we can calculate the average sale period:

Average sale period = 365 days / 6 = 60.83 days

Therefore, the closest option is B.

Irally Company,a Retailer,had Cost of Goods Sold of $150,000 Last