Cost of Goods Sold $18,800

Question

Beginning Merchandise Inventory 520
Ending Merchandise Inventory 470

Select the labels and enter the amounts to compute the inventory turnover. ​(Enter the amount for average inventory to one decimal​ place, X.X. Round your answer to two decimal​ places, X.XX.)

Answer 1

To compute the inventory turnover, you first need to calculate the average inventory, and then use the formula for inventory turnover.

1. Calculate Average Inventory: \[ \text{Average Inventory} = \frac{\text{Beginning Merchandise Inventory} + \text{Ending Merchandise Inventory}}{2} \] \[ \text{Average Inventory} = \frac{520 + 470}{2} = \frac{990}{2} = 495.0 \]

2. Inventory Turnover Formula: \[ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \] \[ \text{Inventory Turnover} = \frac{18,800}{495.0} \approx 37.88 \]

Summary of the calculations:

• Average Inventory: $495.0
• Inventory Turnover: $37.88

You can enter the following amounts:

• Average Inventory: 495.0
• Cost of Goods Sold: 18,800
• Inventory Turnover: 37.88

Answer 2

Select the labels and enter the amounts to compute the​ days' sales in inventory for the year. ​(Round your answer to two decimal​ places, X.XX.)

Answer 3

To compute the days' sales in inventory, you first need to calculate the inventory turnover and then use that to find the days' sales in inventory with the following formula:

Steps to Calculate Days' Sales in Inventory

1. Calculate Inventory Turnover (as we previously calculated): \[ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \] Given:

   • Cost of Goods Sold (COGS) = $18,800
   • Average Inventory = $495.0 (calculated previously)

   \[ \text{Inventory Turnover} = \frac{18,800}{495.0} \approx 37.88 \]

2. Calculate Days' Sales in Inventory: \[ \text{Days' Sales in Inventory} = \frac{365}{\text{Inventory Turnover}} \] \[ \text{Days' Sales in Inventory} = \frac{365}{37.88} \approx 9.63 \]

Summary of the calculations:

• Average Inventory: 495.0
• Inventory Turnover: 37.88
• Days' Sales in Inventory: 9.63

You can enter the following amounts:

• Inventory Turnover: 37.88
• Days' Sales in Inventory: 9.63

Therefore, the final answer for Days' Sales in Inventory is 9.63.