Financial statements for Orange Company appear below: Dividends during Year 2 totaled $156 thousand, of which $18 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $100.

-Orange Company's average sale period for Year 2 was closest to:
A)23.2 days
B)29.5 days
C)33.2 days
D)20.6 days

Question

Financial statements for Orange Company appear below:   Dividends during Year 2 totaled $156 thousand, of which $18 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $100.

-Orange Company's average sale period for Year 2 was closest to:
A)23.2 days 
B)29.5 days 
C)33.2 days 
D)20.6 days

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold F1F1F1S1F1F1F10 Average inventory balance
= $1,980 F1F1F1S1F1F1F10 $160* = 12.38
*Average inventory balance = ($160 + $160)F1F1F1S1F1F1F10 2 = $160
Average sale period = 365 days F1F1F1S1F1F1F10 Inventory turnover
= 365 days F1F1F1S1F1F1F10 12.38 = 29.5 days

Financial Statements for Orange Company Appear Below: Dividends