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

Solutions

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

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