Tinker\'s 2014 cost of goods sold was $920,000 and 2013 cost of goods sold was $

Question

Tinker's 2014 cost of goods sold was $920,000 and 2013 cost of goods sold was $940,000. The inventory at the end of 2014 was $205,000 and $225,000 at the end of 2013. Tinker’s average number of days to sell its inventory during 2014 is closest to: (Use 365 days a year. Do not round intermediate calculations.)

81.33 days

87.37 days

85.30 days

83.48 days

Tinker's 2014 cost of goods sold was $920,000 and 2013 cost of goods sold was $940,000. The inventory at the end of 2014 was $205,000 and $225,000 at the end of 2013. Tinker’s average number of days to sell its inventory during 2014 is closest to: (Use 365 days a year. Do not round intermediate calculations.)

Explanation / Answer

85.30 days Statement showing computations Particulars Amount Opening Inventory for 2014            225,000.00 Closing Inventory for 2014            205,000.00 Average Inventory = (Op+Cl)/2 Average Inventory = (225,000+205,000)/2            215,000.00 Cost of goods sold            920,000.00 Inventory turnover ratio = COGS/Avg inv Inventory turnover ratio =920,000/215,000                         4.28 Average number of days to sell its inventory = 365/ITR Average number of days to sell its inventory = 365/4.28                      85.30

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