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21 October, 15:54

Pascarelli Corporation's inventory at the end of Year 2 was $132,000 and its inventory at the end of Year 1 was $160,000. Cost of goods sold amounted to $920,000 in Year 2. The company's average sale period for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)

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  1. 21 October, 19:22
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    58 days

    Explanation:

    Inventory turnover = Cost of goods sold : Average inventory

    = $920,000 : $146,000 = 6.30 (rounded)

    Average inventory = ($132,000 + $160,000) : 2

    =$292,000: 2

    = $146,000

    Average sale period = 365 days : Inventory turnover

    = 365 days : 6.30 = 57.9

    Approximately 58 days

    Therefore the company's average sale period for Year 2 is closest to 58 days
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