Calculate days of sales in inventory using cost of goods


Canadian Bacon Inc. financial statements are presented in the table below. Based on the information in the table, and using cost of goods sold and a 365-day year, calculate Days of Sales in Inventory (using cost of goods sold). Round the answers to two decimal places Balance Sheet December 31, 2011 Cash and marketable securities $143,000 Accounts payable $278,000 Accounts receivable $354,000 Notes payable $87,000 Inventories $672,000 Accrued expenses $65,000 Prepaid expenses $12,500 Total current liabilities $430,000 Total current assets $1,181,500 Long-term debt $284,000 Gross fixed assets $1,675,000 Par value and paid-in-capital $228,000 Less: accumulated depreciation $500,000 Retained Earnings $1,414,500 Net fixed assets $1,175,000 Common Equity 1,642,500 Total assets $2,356,500 Total liabilities and owner’s equity $2,356,500 Income Statement Year of 2011 Net sales (all credit) $3,136,600.00 Less: Cost of goods sold $2,195,620.00 Selling and administrative expenses $345,000.00 Depreciation expense $146,000.00 EBIT $449,980.00 Interest expense $45,300.00 Earnings before taxes $404,680.00 Income taxes $161,872.00 Net income $242,808.00

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Financial Management: Calculate days of sales in inventory using cost of goods
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