Data from Estrin Corporation's most recent balance sheet and income statement appear below: $$\begin{array} { | l | r | r | }
\hline & \text { This Y ear } & \text { Last Year } \
\hline \text { Accounts receivable } & \$ 109,000 & \$ 106,000 \
\hline \text { Inventory } & \$ 139,000 & \$ 158,000 \
\hline \text { Sales on account } & \$ 787,000 & \
\hline \text { Cost of goods sold } & \$ 501,000 & \
\hline
\end{array}$$ The average sale period for this year is closest to:
A)101 days
B)50 days
C)108 days
D)45 days

Question

Data from Estrin Corporation's most recent balance sheet and income statement appear below: $$\begin{array} { | l | r | r | } 
\hline & \text { This Y ear } & \text { Last Year } \
\hline \text { Accounts receivable } & \$ 109,000 & \$ 106,000 \
\hline \text { Inventory } & \$ 139,000 & \$ 158,000 \
\hline \text { Sales on account } & \$ 787,000 & \
\hline \text { Cost of goods sold } & \$ 501,000 & \
\hline
\end{array}$$ The average sale period for this year is closest to:
A)101 days
B)50 days
C)108 days
D)45 days

Quizplus · Accepted Answer

The average sale period is calculated using the formula: (Average Inventory / Cost of Goods Sold) * 365. The average inventory is (139,000 + 158,000) / 2 = 148,500. Thus, (148,500 / 501,000) * 365 ≈ 108 days.

Data from Estrin Corporation's Most Recent Balance Sheet and Income