1.7 question sample assesment 1

erykfrechowicz88

I have a problem with 1.7 question
I am trying to calculate inventory holding period but not sure how to calculate inventory. I want to use formula for Inventory turnover : Inventory/Cost of Sales x 365 days . Cost of Sales = 861858 and my answer is 49.265729 based on average inventory so 50 days but correct answer should be 49 according to AAT. I am confused.

kimbo86

Hi
It's asking for the answer to the nearest whole day so 49.26 needs to be rounded down to 49.

erykfrechowicz88

thanks

BethG

@kimbo86 @erykfrechowicz88 can i just ask, what figure did you use for inventory? thanks

Irrorate

Inventory says average so add up the opening and closing inventory figures then divide by 2.