Question

Financial statement data at December 31 for Alpine Company are shown below.

Cost of merchandise sold $1,050,000
Inventories:
Beginning of year 380,000
End of year 320,000
Determine the number of days' sales in inventory for the year. a. 118.8 days b. 121.7 days c. 111.2 days d. 132.1 days

Answer 1

b. 121.7 days

Step-by-step explanation:

Number of day's in sales =
`(Average\: Inventory)/(Cost \:of \:Goods \:Sold) * 365`

Here average Inventory =
`(380,000 \: + \:320,000)/(2) = 350,000`

Therefore Number of days in sales =
`(350,000)/(1,050,000) * 365` = 121.7 = days

Thus, in this manner we calculate the average number of days in sales, which are 121.7 days

b. 121.7 days