operating cycle number, please, balance, solution, beginning

slackeranalyst

inventory - beginning balance - 2000
inventory - ending balance - 2300
cogs - 20,000

solution: number of days of inventory = 2300/ (20,000/365) = 41.975 days


can you please tell me why they used ending inventory balance and no AVG inventory?

cyber21

DSO = 365 / (COGS/Ave Inventory)
= 365 / {20,000/[(2,000+2,300)/2]}
= 365 / 20,000/2,150
= 39.2375

Which provider gave you that answer? They are wrong.

jim8z3

I think there's also a problem in the curriculum that uses ending inventory instead of average inventory. Im not sure why.