Question

1. Explain the statement of Financial position and its uses and limitations 2. Inventory Turnover Ratio...

1. Explain the statement of Financial position and its uses and limitations

2. Inventory Turnover Ratio of Asghar Company is 2 Times. Their annual report shows a beginning inventory of SAR 65,720 and Cost of Goods Sold of SAR 125,800. Find out the amount of ending inventory. You are also required to compute average days required to sell inventory

* no hand writing

* answer smust be corret

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Answer #1
Inventory Turnover Ratio = Cost of goods sold / average inventory
2= $125800/Average Inventory
Average Inventory = $125800/2
Average Inventory =$62900
Average Inventory = (beginning inventory + ending inventory)/2
62900= ( $65720+Ending Inventory)/2
Ending Inevtory =$125800-65720
Ending Inventory =$60080
Average days reqauired to sale inventory
= 365/ inventory turnover ratio
= 365 days /2
=182.5 days
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