Kelley Company provided the following account balances for 2018: $$\begin{array} { | l | r| }
\hline \text { Cost of Goods Sold (Cost of sales) } & \$ 1,300,000 \
\hline \text { Beginning Merchandise Inventory } & 340,000 \
\hline \text { Ending Merchandise Inventory } & 350,000 \
\hline
\end{array}$$ Calculate the average number of days that inventory was held by Kelley Company during 2018.(Assume 365 days in a year.Round your intermediate calculations and final answer to two decimal places.)

Question

Kelley Company provided the following account balances for 2018: $$\begin{array} { | l | r| } 
\hline \text { Cost of Goods Sold (Cost of sales) } & \$ 1,300,000 \
\hline \text { Beginning Merchandise Inventory } & 340,000 \
\hline \text { Ending Merchandise Inventory } & 350,000 \
\hline
\end{array}$$ Calculate the average number of days that inventory was held by Kelley Company during 2018.(Assume 365 days in a year.Round your intermediate calculations and final answer to two decimal places.)

Quizplus · Accepted Answer

The average inventory is calculated as (Beginning Inventory + Ending Inventory) / 2 = (340,000 + 350,000) / 2 = 345,000. The inventory turnover ratio is Cost of Goods Sold / Average Inventory = 1,300,000 / 345,000 ≈ 3.77. The average number of days inventory is held is 365 / Inventory Turnover Ratio = 365 / 3.77 ≈ 96.82 days.

Kelley Company Provided the Following Account Balances for 2018 Calculate the Average Number of Days That Inventory Was Held