Question

M LI View Help 37) Kelley Company provided the following account balances for 2018: Cost of Goods Sold (Cost of sales) Beginning Merchandise Inventory Ending Merchandise Inventory $1,300,000 340,000 350,000 Calculate the average number of days that inventory was held by Kelley Company during 2018 (Assume 365 days in a year. Round your intermediate calculations and final answer to two decimal places.) A) 95.55 days B) 194.15 days C) 96.82 days D) 98.38 days 38) Which of the following is an objective of internal control? A) to guarantee that a business makes a profit B) to ensure timely payment of accounts payable C) to encourage employees to follow company policies D) to ensure timely collection of accounts receivable 39) Which of the following is a benefit provided by intemal control? A) ensuring timely collection of accounts receivables B) ensuring that a business is profitable C) ensuring that collusion will never happen D) promoting operational efficiency Page of 2465 words D English (United States D Focus A ENG 11/20

Answer 1

Days in Inventory = 365/Inventory Turnover Inventory Turnover = Cost of Good Sold /Average Inventory (in times) Particulars Average Inventory Beginning Inventory (A) $3,40,000 Add: Ending Inventory (B) $3,50,000 Total (C)= (A) + (B) $6,90,000 Average Inventory (D) = (C)/2 $3,45,000 [$690000/ 2] Cost of Good Sold (E) $13,00,000 Inventory Turnover (E )/(D) 3.77 ($1300000/ $345000] Days in Inventory 96.82 [365 / $3.77] The correct answer is option (C)i.e 96.82 days