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13 September, 05:01

Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? (Hint: Days in inventory=365/Inventory turnover)

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  1. 13 September, 05:24
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    121.07 days

    Explanation:

    Provided data from the question;

    Sales = $897,400

    costs of goods sold = $628,300,

    inventory = $208,400

    Accounts receivable = $74,100

    Days in inventory=365/Inventory turnover

    How many day, on average, does it take the firm to sell is inventory assuming that all sales are on credit =

    Inventory Turnover = cost of goods sold : inventory

    = $628,300 : $208,400 = 3.014875

    Days in Inventory = 365 / 3.014875

    = 121.07days
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