Question

Anthony Corporation reported the following amounts for the year: Net sales $296,000 Cost of goods sold 138,000 Average inventory 50,000 Anthony's average days in inventory is (round to the nearest whole day):

Answer 1

Answer:

132.25 days

Explanation:

average days in inventory is an activity ratio.

Activity ratios calculates the efficiency of performing daily tasks.

average days in inventory = number of days in a period / inventory turnover

inventory turnover = cost of goods sold / average inventory = 138,000 / 50,000 = 2.76

Assuming a 365 day period , 365 / 2.76 = 132.25