The following information was available for Bowyer Company at December 31, 2014: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $880,000; and sales $1,200,000. Bowyer's days in inventory in 2014 was
A) 24.3 days.
B) 33.2 days.
C) 29 days.
D) 37.2 days.

Question

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 / $880,000) * 365 = 33.2 days.

The Following Information Was Available for Bowyer Company at December