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1 September, 05:38

A company has $72,500 in inventory at the beginning of the accounting period and $65,500 at the end of the accounting period. Sales

revenue is $986,400, cost of goods sold is $572,700, and net income is $124,200 for the accounting period. On average, this company has

inventory on hand for approximately:

61 days.

44 days

26 days

203 days

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Answers (1)
  1. 1 September, 06:28
    0
    = 44 days

    Explanation:

    Days' of inventory on hand measures the number of days a business takes to sell its average balance of inventory.

    Days of inventory = average inventory/cost of goods sold x 365 days.

    For this company:

    opening stock: $ 72, 500

    closing stock: $ 65, 500

    cost of goods sold: $ 572 700

    Average inventory = 72500+65500/2

    = $ 69,000.00

    Days of inventory = 69,000/572 700x365

    = 43.975

    = 44 days
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