Inventory Analysis A company reports the following: Determine (a) the inventory

Question

Inventory Analysis

A company reports the following:

Determine (a) the inventory turnover and (b) the number of days' sales in inventory. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume 365 days a year.

Cost of goods sold $630,000 Average inventory 90,000 Cengage 1. PE 15-1A PE 13-2A 3. PE15-3A nventury Anlysis A company reports the following: Ccat of good: sod G30,000 90,000 4. PE 154A Datermin (a the Inventory tunover and (b) tha numbar ot days sales In Inventory. Round Intarim alculatons to the naarast dollar and tinal answers to ona decimal place. Assume 363 days a year a. Tnntary turnover b. Number ot days sals In Inventory 6. PE15 11.A Chetk Ny Wurk Prevlous Next Progress: 61S items ssgnment Score: 916T% Sawa and Fit Suhmit Assignment for Crading O Type here to seardh

Explanation / Answer

ReqA. Cost of Goods sold   $ 630,000 Average Inventory    $ 90,000 Inventory Turnover ratio = Cost of Goods sold / Average Inventory             ( 630,000 /90,000 ) = 7 times ReqB. Number of days in a year = 365 days Cost of Goods sold   $ 630,000 Average Inventory    $ 90,000 Number of days sales in inventory = Number of days in year * Average Inventory / Cost of Goods sold ( 365 * 90,000 / 630,000 ) = 52.14 days

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