Question

At December 31, 2017, the following information was available for A. Kamble Company: ending inventory $38,250, beginning inventory $58,500, cost of goods sold $273,000, and sales revenue $366,000.

A) Calculate inventory turnover for A. Kamble Company. (Round answer to 1 decimal place, e.g. 1.5.) Inventory turnover times

B) Calculate days in inventory for A. Kamble Company. (Round answer to 1 decimal place, e.g. 1.5. Use 365 days for calculation.)

Days in inventory

$

days

Answer 1

Part A)

Inventory turnover ratio = cost of goods sold ÷ average inventory

= 273000÷ (( 38250+58500)/2)

= 5.6 ( rounded off to 1 decimal place)

Part B)

Days in inventory

= (365× average inventory)/ cost of goods sold

= (365×((38250+58500)/2))/273000

= 64.7 days ( rounded off to 1 decimal places)

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