Based on the following data for the current year, what is the number of days' sales in inventory? $$\begin{array} { l r }
\text { Sales on account during year } & \$ 1,204,500 \
\text { Cost of goods sold during year } & 657,000 \
\text { Accounts receivable, beginning of year } & 75,000 \
\text { Accounts receivable, end of year } & 85,000 \
\text { Inventory, beginning of year } & 85,600 \
\text { Inventory, end of year } & 98,600
\end{array}$$
A) 51.2
B) 44.4
C) 6.5
D) 7.5

Question

Based on the following data for the current year, what is the number of days' sales in inventory? $$\begin{array} { l r } 
\text { Sales on account during year } & \$ 1,204,500 \
\text { Cost of goods sold during year } & 657,000 \
\text { Accounts receivable, beginning of year } & 75,000 \
\text { Accounts receivable, end of year } & 85,000 \
\text { Inventory, beginning of year } & 85,600 \
\text { Inventory, end of year } & 98,600
\end{array}$$
A) 51.2
B) 44.4
C) 6.5
D) 7.5

Quizplus · Accepted Answer

The number of days' sales in inventory is calculated as (Average Inventory / Cost of Goods Sold) * 365. The average inventory is (85,600 + 98,600) / 2 = 92,100. Thus, (92,100 / 657,000) * 365 = 51.2 days.

Based on the Following Data for the Current Year, What