Freiman Corporation's most recent balance sheet and income statement appear below: The average sale period for Year 2 is closest to:

Question

Freiman Corporation's most recent balance sheet and income statement appear below:   The average sale period for Year 2 is closest to:

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ Average inventory balance*
= $780 ÷ $125 = 6.24
* Average inventory balance = ($120 + $130)÷ 2 = $125
Average sale period = 365 days ÷ Inventory turnover
= 365 days ÷ 6.24 = 58.5 days (rounded)

Freiman Corporation's Most Recent Balance Sheet and Income Statement Appear