Average Inventory, Inventory Turnover Ratio, Inventory Turnover in Days Belt Company had net sales of $1,891,675,000...

Average Inventory, Inventory Turnover Ratio, Inventory Turnover in Days

Belt Company had net sales of $1,891,675,000 and cost of goods sold of $1,713,635,000. Belt had the following balances:

	January 1	December 31
Inventories	$301,500,000	$385,000,000

Required:

Assume 365 days per year.

1. Calculate the average inventory.
$

2. Calculate the inventory turnover ratio. Round to two decimal places.
times

3. Calculate the inventory turnover in days. Round to two decimal places.
days

Solutions

Expert Solution



	Answer = 1

	Average Inventory = (Opening inventory + Closing inventory) / 2
	Average Inventory =
	Opening Inventory =	$ 30,15,00,000
	Add: Closing inventory	$ 38,50,00,000
	Total	$ 68,65,00,000
	Divide by	"/" By 2
	Average Inventory =	$ 34,32,50,000


	Answer =2)

	Inventory turnover Ratio =
	COGS	$ 1,71,36,35,000
	Divide By =	"/" By
	Average inventory=	$ 34,32,50,000
	Inventory turnover Ratio = (Times)	$ 4.99


	Answer = 3)
	Days in inventory = (Ending inventory / COGS ) X 365

	Ending inventory =	$ 38,50,00,000
	Divide By =	"/" By
	COGS	$ 1,71,36,35,000
	Equal to =	0.22
	Multiply By 365	"X "By 365
	Days in inventory =	82.00

	Answer = 82 Days

ekkarill92 answered 1 year ago

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