Question

In: Accounting

what is Bongo's 2020 average days to sell inventory

The following information relates to Bongo Beets:

Particulars	2020	2019
Net Sales (all on account)	$5,00,000	$4,00,000
Cost of goods sold	3,90,000	2,95,000
Ending accounts receivable	30,000	26,000
Ending Inventory	47,000	44,000

What is Bongo's 2020 average days to sell inventory

(a)26 days

(b)1 month

(c) 41 days,3 hours

(d)4 43 days

Expert Solution

Calculation of Bongo's 2020 Average Days to sell Inventory

Formula for calculating average days to sell inventory = ( Average inventory / Cost of goods sold) * 365

Average inventory = (Ending Inventory 2019 + Ending Inventory 2020) /2

=(44,000 + 47,000) / 2

= $45,500

Average days to sell inventory = ($45,500 / 3,90,000) * 365

= 43 Days

Hence , option d. 43 days is the correct option

option d .43 days is the correct option

balaji rao answered 3 years ago

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