Financial statements for Maraby Corporation appear below:

-Maraby Corporation's average sale period for Year 2 was closest to:
A) 38.8 days
B) 32.6 days
C) 46.6 days
D) 27.0 days

Question

Financial statements for Maraby Corporation appear below:
  
-Maraby Corporation's average sale period for Year 2 was closest to:
A) 38.8 days 
B) 32.6 days 
C) 46.6 days 
D) 27.0 days

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold ÷ Average inventory balance = $1,370 ÷ $145* = 9.4 (rounded)
*Average inventory balance = ($140 + $150) ÷ 2 = $145
Average sale period = 365 days ÷ Inventory turnover (see above) = 365 days ÷ 9.4 = 38.8 days (rounded)

Financial Statements for Maraby Corporation Appear Below