Question

zhang company reported cost of goods sold of $840,000, ending inventory of $168,000, and net sales of $2,338,000. the days’ sales in inventory is. multiple choice 73 days. 1,825 days. 7 days. 131 days. 26 days.

Explanation:

Step1: Recall the formula for Days' sales in inventory

The formula for Days' sales in inventory is $\text{Days' sales in inventory} = \frac{\text{Ending Inventory}}{\text{Cost of Goods Sold}} \times 365$ (assuming a 365 - day year).

Step2: Identify the given values

We are given that the ending inventory ($\text{Ending Inventory}$) is $\$168,000$ and the cost of goods sold ($\text{Cost of Goods Sold}$) is $\$840,000$.

Step3: Substitute the values into the formula

First, calculate the ratio of ending inventory to cost of goods sold: $\frac{168000}{840000}= 0.2$.
Then, multiply this ratio by 365: $0.2\times365 = 73$.

Answer:

73 days (the option corresponding to 73 days)