Use the following information for Ephron Company to compute days' sales in inventory for Year 2. $$\begin{array} { | l | r | r | }
\hline & \text { Year } 2 & \text { Y ear 1 } \
\hline \text { Net sales } & \$ 547,500 & \$ 572,000 \
\hline \text { Cost of goods sold } & 348,500 & 370,840 \
\hline \text { Ending inventory } & 75,700 & 81,400 \
\hline
\end{array}$$
A)50.5
B)76.8
C)82.3
D)79.3
E)52.4

Question

Use the following information for Ephron Company to compute days' sales in inventory for Year 2. $$\begin{array} { | l | r | r | } 
\hline & \text { Year } 2 & \text { Y ear 1 } \
\hline \text { Net sales } & \$ 547,500 & \$ 572,000 \
\hline \text { Cost of goods sold } & 348,500 & 370,840 \
\hline \text { Ending inventory } & 75,700 & 81,400 \
\hline
\end{array}$$
A)50.5
B)76.8
C)82.3
D)79.3
E)52.4

Quizplus · Accepted Answer

Days' sales in inventory is calculated as (Ending Inventory / Cost of Goods Sold) * 365. For Year 2, it is (75,700 / 348,500) * 365 = 79.3 days.

Use the Following Information for Ephron Company to Compute Days