The following information is available for Heller Company Beginning inventory $60,000 Cost of goods sold 640,00 Ending inventory 100, 000 Sales revenue 1,000,000 Compute each of the following A) inventory turnover B) days in inventory

Accounting Aug 28, 2020

Expert Solution

A). Computation of the inventory turnover:-

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

= (60,000 + 100,000) / 2

= 160,000 / 2

= 80,000

Inventory turnover = Cost of goods sold / Average inventory

= 640,000 / 80,000

= 8 times

B). Computation of the days in inventory:-

Days in inventory = 365 / Inventory turnover

= 365 / 8

= 45.63 days

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