Selected information from the accounting records of Monroe Manufacturing Company follows:

What is the number of days' sales in average inventories for the year?

Question

Selected information from the accounting records of Monroe Manufacturing Company follows:

What is the number of days' sales in average inventories for the year?

Quizplus · Accepted Answer

Days' sales in average inventories = (Average Inventory ÷ Cost of Goods Sold) x 365
= ( $82,500 ÷ $869,100) x 365
= 34.349 x 365
= 12,516.29

Therefore, the number of days' sales in average inventories for the year is approximately 94.9 (rounded to one decimal place).

Option A is incorrect because the calculation used to arrive at this figure is incorrect.

Option C is incorrect because it is an incorrect calculation.

Option D is incorrect because the calculation used to arrive at this figure is incorrect.

Selected Information from the Accounting Records of Monroe Manufacturing Company