Selected data pertaining to Lore Co. for the calendar year 2006 is as follows:
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|
Net cash sales |
$ 3,000 |
|
Cost of goods sold |
18,000 |
|
Inventory at beginning of year |
6,000 |
|
Purchases |
24,000 |
|
Accounts receivable at beginning of year |
20,000 |
|
Accounts receivable at end of year |
22,000 |
Lore would use which of the following to determine the average days’ sales in inventory?
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|
Numerator |
Denominator |
|
|
a. |
365 |
Average inventory |
|
b. |
365 |
Inventory turnover |
|
c. |
Average inventory |
Sales divided by 365 |
|
d. |
Sales divided by 365 |
Inventory turnover |