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 days inventory 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