Anthony Corporation reported the following amounts for the year: Anthony's average days in inventory is:

Question

Anthony Corporation reported the following amounts for the year:  Anthony's average days in inventory is:

Quizplus · Accepted Answer

Average days in inventory = (365 days / inventory turnover ratio)

Inventory turnover ratio = cost of goods sold / average inventory

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

Using the given information from the year:

Cost of goods sold = $1,700,000 
Beginning inventory = $250,000 
Ending inventory = $300,000

Average inventory = ($250,000 + $300,000) / 2 = $275,000

Inventory turnover ratio = $1,700,000 / $275,000 = 6.182

Average days in inventory = 365 / 6.182 = 59.15 ≈ 132 days.

Therefore, the best answer is C, 132 days.

Anthony Corporation Reported the Following Amounts for the Year