Data from Ben Corporation's most recent balance sheet and income statement appear below: This YearLast YearAccounts receivable, net$104,000 $124,000 Inventory$159,000 $188,000 Sales on account$825,000 Cost of goods sold$660,000 Required:Compute the average sale period for this year:
What will be an ideal response?
Average sale period = 365 days ÷ Inventory turnover*
= 365 days ÷ 3.80 = 96.1 days
*Inventory turnover = Cost of goods sold ÷ Average inventory balance**
= $660,000 ÷ $173,500 = 3.80
**Average inventory= ($159,000 + $188,000) ÷ 2 = $173,500
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