Question

Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Its days' sales in inventory equals: (Use 365 days a year.)
A)0.21.
B)4.51.
C)4.79.
D)76.1 days.
E)80.9 days.

Answer 1

Answer

E) 80.9 days

Explanation

Days Sales of Inventory = (Ending Inventory / Cost of Goods Sold) x 365

Where,

Ending Inventory = $2,089 million

Cost of Goods Sold = $9,421 million

Days Sales of Inventory = (2089 / 9421) x 365 = 80.9 days