Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? a. 74.19 days. b. 84.76 days. c. 121.07 days. d. 138.46 days. e. 151.21 days.

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Business

Journey Hatfield

3 March, 11:54

Al's Sport Store has sales of $897,400, costs of goods sold of $628,300, inventory of $208,400, and accounts receivable of $74,100. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? a. 74.19 days. b. 84.76 days. c. 121.07 days. d. 138.46 days. e. 151.21 days.

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Macey Benson · Answer 1

The number of days, on average, takes the firm to sell its inventory: c. 121.07 days

Explanation:

The number of days takes the firm to sell its inventory indicates how many days on average a company turns its inventory into sales, is calculated by following formula:

Days' sales in inventory = (Inventory/Costs of goods sold) x 365

Al's Sport Store has costs of goods sold of $628,300, inventory of $208,400

Days' sales in inventory = ($208,400/$628,300) x 365 = 121.07 days