Refer to the following selected financial information from G

Refer to the following selected financial information from Graceworks, Corp. Compute the company\'s days\' sales in inventory for Year 2. (Use 365 days a year.) Year 2 $274,000 $483,400 Year 1 $256,500 $430,100 Merchandise inventory Cost of goods sold O 232.5 O 206.9 O 193.7 O 2177 O 212.0

Solution

Days sales in inventory=(Merchandise inventory/COGS)*365 days

which is equal to

=(274000/483400)*365 days

which is equal to

=206.9 days(approx).