Calm Day reported the following income statement for the year ended December 31, 2019:

CALM DAY
Income Statement
Years Ended December 31, 2019

Net Sales Revenue

\( 128,000

Cost of Goods Sold:

Beginning Merchandise Inventory

\) 9,000

Net Cost of Purchases

62,000

Cost of Goods Available for Sale

71,000

Less: Ending Merchandise Inventory

12,200

Cost of Goods Sold

58,800

Gross Profit

69,200

Operating Expenses

41,600

Net Income

$ 27,600

Requirements

2. Compute Calm Day’s days’ sales in inventory for the year. (Round to two decimal places.)

Short Answer

Expert verified

Day’s sales on inventory: 65.77 days

Step by step solution

01

Step-by-Step-SolutionStep 1: Day’s sales in inventory

Day’s sales in inventory is the no. of days required to convert the inventory into sales. It is computed by dividing the no. of days in the period by the inventory turnover ratio.

02

Day’s sales in inventory for Calm Days

Day'ssalesofInventory=No.ofdaysinayearInventoryTurnover=3655.55=65.77Days

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