Answer and Explanation:
The computation is shown below:
(a) Inventory turnover is
= Cost of goods sold ÷ Average inventory
= $605,900 ÷ $170,000
= 3.56 Times
And
(b) Number of days sales in inventory is
= Year end inventory × total number of days in a year ÷ cost of goods sold
= $157,700 × 365 ÷ $605,900
= 95 days
We simply applied the above formula so that the correct value could come
And, the same is to be considered
