Question

At December 31, 2019, the following information was available for A. Kamble Company: ending inventory $40,000, beginning inventory $60,000, cost of goods sold $270,000, and sales revenue $380,000.Calculate inventory turnover for A. Kamble Company. (Round answer to 1 decimal place, e.g. 1.5.)Inventory turnover ______ times.Calculate days in inventory for A. Kamble Company. (Round answer to 1 decimal place, e.g. 1.5. Use 365 days for calculation.)Days in inventory $______ days.

Answer 1

5.4 times and 67.5 days

Step-by-step explanation:

The computation is shown below:

Inventory turnover ratio = Cost of goods sold ÷ average inventory

where,

Average inventory = (Opening balance of inventory + ending balance of inventory) ÷ 2

= ($60,000 + $40,000) ÷ 2

= $50,000

And, the cost of good sold is $270,000

Now put these values to the above formula

So, the answer would be equal to

= $270,000 ÷ $50,000

= 5.4 times

Now Days in inventory

= Total number of days in a year ÷ inventory turnover ratio

= 365 days ÷ 5.40 times

= 67.5 days