based on the following data for the current year what is the

based on the following data for the current year what is the number of days sales in inventory

net sales on account during the year. 1204500
cost of merchandise sold during the year 657000
Accts rec. beginning of year 75000
Accts rec. end of year 85000
inventory beginning of year 85600
inventory end of year 98600

Solution

Average inventory=(Beginning inventory+Ending inventory)/2

=(85600+98600)/2=$92100

Hence number of days sales in inventory=(Average inventory/COGS)*365 days

=(92100/657000)*365 days

which is equal to

=51.17 days(Approx).