Thomas Company provided the following particulars for year 2017: $$\begin{array} { | l | l | }
\hline \text { Cost of sales } & \$ 1,400,000 \
\hline \text { Beginning inventory } & 340,000 \
\hline \text { Ending inventory } & 350,000 \
\hline
\end{array}$$ Calculate the average number of days that inventory was held by Thomas Company during 2017.(Assume 365 days in a year.Round your intermediate calculations and final answer to two decimal places. )
A)91.25 days
B)179.8 days
C)88.59 days
D)89.9 days

Question

Thomas Company provided the following particulars for year 2017: $$\begin{array} { | l | l | } 
\hline \text { Cost of sales } & \$ 1,400,000 \
\hline \text { Beginning inventory } & 340,000 \
\hline \text { Ending inventory } & 350,000 \
\hline
\end{array}$$ Calculate the average number of days that inventory was held by Thomas Company during 2017.(Assume 365 days in a year.Round your intermediate calculations and final answer to two decimal places. )
A)91.25 days
B)179.8 days
C)88.59 days
D)89.9 days

Quizplus · Accepted Answer

The average inventory is $(340,000 + 350,000) / 2 = 345,000$. The inventory turnover ratio is $1,400,000 / 345,000 = 4.06$. The average number of days inventory was held is $365 / 4.06 = 89.9$ days.

Thomas Company Provided the Following Particulars for Year 2017 Calculate the Average Number of Days That Inventory Was Held