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In: Accounting

Kelley, Inc. provided the following account balances for 2018: Cost of Goods Sold (Cost of sales)...

Kelley, Inc. provided the following account balances for 2018:

Cost of Goods Sold (Cost of sales)

$ 1 comma 400 comma 000$1,400,000

Beginning Merchandise Inventory

300,000

Ending Merchandise Inventory

350,000

Calculate the average number of days that inventory was held by Kelley, Inc. during 2018. (Assume 365 days in a year. Round your intermediate calculations and final answer to two decimal places.)

Solutions

Expert Solution

Answer:-

No. of days sales in inventory = Number of days in a year / Inventory turnover ratio

                                          =$365 days/4 times

                                          =91.25 days

Explanation:-Inventory turnover ratio= Cost of goods sold/Average inventory

                                          = $1400000/($300000+$350000/2)

                                          =$1400000/$325000

                                          = 4 times

ekkarill92 answered 1 year ago
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