The following balance sheet information is provided for Paris Company: Assuming 2012 cost of goods sold is $365,000, what is the company's average days to sell inventory?
A)25 days
B)15 days
C)100 days
D)None of the other answers are correct.

Question

The following balance sheet information is provided for Paris Company:  Assuming 2012 cost of goods sold is $365,000, what is the company's average days to sell inventory?
A)25 days 
B)15 days 
C)100 days 
D)None of the other answers are correct.

Quizplus · Accepted Answer

Average days to sell inventory is: 365/inventory turnover. Inventory turnover is: cost of goods sold/average inventory. Cost of goods sold ($365,000/average inventory (($21,500 + 28,500)/2) = 14.6. 365/4.6 = 25 days.

The Following Balance Sheet Information Is Provided for Paris Company