Question

In: Accounting

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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