Pascarelli Corporation's inventory at the end of Year 2 was $122,000 and its inventory at the end of Year 1 was $150,000. Cost of goods sold amounted to $870,000 in Year 2. The company's average sale period (turnover in days) for Year 2 is closest to:
A)230.1 days
B)51.2 days
C)57.0 days
D)32.3 days

Question

Quizplus · Accepted Answer

The average sale period can be calculated using the following formula:

Average Sale Period = (Inventory / Cost of Goods Sold) x 365

Substituting the given values:

Average Sale Period = (122,000 / 870,000) x 365 = 51.13 days

Therefore, the closest option is C) 57.0 days.

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