39 For 2017 the average time 360 day year for Red Company to

39. For 2017, the average time (360 day year) for Red Company to sell its inventory was: Cost of GoodsSold $225 $234 $192 Ending Inventory Year 2015 2016 2017 $25 $26 $22 Red Company a. 39.8 days b. 40.0 days c. 41.2 days d. 45.0 days

Solution

Day\'s Sales in Inventory = (Average Ending Inventory/ Cost of Good Sold ) x 360 days Average Inventory = ($26 + $22)/2 $24.00 Day\'s Sales in Inventory = ($24/ $192 ) x 360 days 45.00 Days