Sun Concepts sells and installs solar energy products. Information from the financial statements for the last two years revealed the following: Beginning Inventory Ending Inventory Cost of Goods Sold Year 1 $ 90,000 $130,000 $605,000 Year 2 130,000 110,e00 720,000 The number of days to sell in Year 2 was approximately: Multiple Choice 75 days 61 days 73 days 66 days
Sun Concepts sells and installs solar energy products. Information from the financial statements for the last two years revealed the following: Beginning Inventory Ending Inventory Cost of Goods Sold Year 1 $ 90,000 $130,000 $605,000 Year 2 130,000 110,e00 720,000 The number of days to sell in Year 2 was approximately: Multiple Choice 75 days 61 days 73 days 66 days
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![### Inventory and Sales Analysis of Sun Concepts
Sun Concepts sells and installs solar energy products. Information from the financial statements for the last two years is presented as follows:
| Year | Beginning Inventory | Ending Inventory | Cost of Goods Sold |
|-------|---------------------|------------------|---------------------|
| Year 1| $90,000 | $130,000 | $605,000 |
| Year 2| $130,000 | $110,000 | $720,000 |
**Question**: The number of days to sell in Year 2 was approximately:
#### Multiple Choice Options:
- 75 days
- 61 days
- 73 days
- 66 days
To calculate the number of days to sell, use the formula for the inventory turnover period:
\[ \text{Days to Sell} = \frac{365}{\text{Inventory Turnover Ratio}} \]
The Inventory Turnover Ratio is calculated as:
\[ \text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \]
Where,
\[ \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2} \]
Plug in the given values to find the approximate days to sell in Year 2.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c07c4d4-8df9-4290-b690-29ea2667e48d%2F2782df64-5e93-4ae5-9cc4-d558b4e866f9%2F7e12jn8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Inventory and Sales Analysis of Sun Concepts
Sun Concepts sells and installs solar energy products. Information from the financial statements for the last two years is presented as follows:
| Year | Beginning Inventory | Ending Inventory | Cost of Goods Sold |
|-------|---------------------|------------------|---------------------|
| Year 1| $90,000 | $130,000 | $605,000 |
| Year 2| $130,000 | $110,000 | $720,000 |
**Question**: The number of days to sell in Year 2 was approximately:
#### Multiple Choice Options:
- 75 days
- 61 days
- 73 days
- 66 days
To calculate the number of days to sell, use the formula for the inventory turnover period:
\[ \text{Days to Sell} = \frac{365}{\text{Inventory Turnover Ratio}} \]
The Inventory Turnover Ratio is calculated as:
\[ \text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \]
Where,
\[ \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2} \]
Plug in the given values to find the approximate days to sell in Year 2.
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