Data from Estrin Corporation's most recent balance sheet and income statement appear below: The average sale period for this year is closest to:
A)101 days
B)50 days
C)108 days
D)45 days

Question

Data from Estrin Corporation's most recent balance sheet and income statement appear below:  The average sale period for this year is closest to:
A)101 days 
B)50 days 
C)108 days 
D)45 days

Quizplus · Accepted Answer

Average inventory balance = ($139,000 + $158,000)÷ 2 = $148,500
Inventory turnover = Cost of goods sold ÷ Average inventory balance
= $501,000 ÷ $148,500 = 3.37 (rounded)
Average sale period = 365 days ÷ Inventory turnover
= 365 days ÷ 3.37 = 108 days (rounded)

Data from Estrin Corporation's Most Recent Balance Sheet and Income