Use the following information to answer the next ten questions:
Excerpts from TPX Company's December 31,2015 and 2014,financial statements are presented below:

-TPX Company's 2015 average days in inventory is:
A)121.7 days.
B)70.2 days.
C)110.6 days.
D)101.4 days.

Question

Use the following information to answer the next ten questions:
Excerpts from TPX Company's December 31,2015 and 2014,financial statements are presented below:
 
-TPX Company's 2015 average days in inventory is:
A)121.7 days. 
B)70.2 days. 
C)110.6 days. 
D)101.4 days.

Quizplus · Accepted Answer

The formula for calculating average days in inventory is (365 * Average Inventory) / Cost of Goods Sold. Using the information provided in the financial statements, the calculation for TPX Company's 2015 average days in inventory is: 
(365 * ((Beginning Inventory + Ending Inventory) / 2)) / Cost of Goods Sold 
= (365 * (($960.3 + $723.6) / 2)) / $6,824.3 
= 112.1 days (rounded to one decimal place) 
Therefore, the closest answer choice is C) 110.6 days.

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