Question

Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? (Hint: Days in inventory=365/Inventory turnover)

Answer 1

Answer:

121.07 days

Explanation:

Provided data from the question;

Sales = $897,400

costs of goods sold = $628,300,

inventory = $208,400

Accounts receivable = $74,100

Days in inventory=365/Inventory turnover

How many day, on average, does it take the firm to sell is inventory assuming that all sales are on credit =

Inventory Turnover = cost of goods sold ÷ inventory

= $628,300 ÷ $208,400 = 3.014875

Days in Inventory = 365 / 3.014875

= 121.07days