J. Shaffer Company has an ending inventory of $360,500 and a cost of goods sold for the

Question:

J. Shaffer Company has an ending inventory of $360,500 and a cost of goods sold for the year of $2,100,000. It has used LIFO inventory for a number of years because of persistent inflation.

Required

a. Compute the days’ sales in inventory.

b. Is J. Shaffer Company’s days’ sales in inventory as computed realistic in comparison with the actual days’ sales in inventory?

c. Would the days’ sales in inventory computed for J. Shaffer Company be a helpful guide?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...