The following information was available for Pete Company at December 31, 2015: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $984,000; and sales $1,350,000. Pete's days in inventory in 2015 was
A) 21.6 days.
B) 25.9 days.
C) 29.7 days.
D) 33.5 days.

Question

The following information was available for Pete Company at December 31, 2015: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $984,000; and sales $1,350,000. Pete's days in inventory in 2015 was 
A) 21.6 days.
B) 25.9 days.
C) 29.7 days.
D) 33.5 days.

Quizplus · Accepted Answer

Days in inventory is calculated as (Ending Inventory / Cost of Goods Sold) * 365. The average inventory is ($90,000 + $70,000) / 2 = $80,000. Days in inventory = ($80,000 / $984,000) * 365 = 29.7 days.

The Following Information Was Available for Pete Company at December