Question

Solve for the missing information designated by “?” in the following table. (Use 365 days in a year. Round the inventory turnover ratio to one decimal place before computing days to sell. Round days to sell to one decimal place.)

	Case BI Purchases CGS EI Inventory Turnover Ratio Days to Sell a. $100 $700 $600 $200 4.0 91.3 b. $200 $1,200 6.0 60.8 c. $1,000 $150 36.5

Answer 1

• Requirement

Case	BI	Purchases	CGS	EI	Inventory Turnover Ratio	Days to sell
a	$                           100.00	$                        700.00	$                        600.00	$                                            200.00	4.0	91.3
b	$                           200.00	$                    1,000.00	$                    1,200.00	$                                            200.00	6.0	60.8
c	$                              50.00	$                        950.00	$                    1,000.00	$                                            150.00	10.0	36.5

Equation used:

BI + Purchases - CGS = EI

Inventory turnover = CGS / [(BI + EI)/2]

Days to sell = 365 / Inventory Turnover

Case	BI	Purchases	CGS	EI	Inventory Turnover Ratio	Days to sell
a	100	700	600	=100+700-600	=600/((100+200)/2)	91.25
b	200	=1200-200	1200	=+((200)*2)-200	6	60.8333333333333
c	=+((100)*2)-150	=1000-50	1000	150	=365/(36.5)	36.5