Use the Following Information Regarding Black Company and Red Company

question 160

Multiple Choice

Use the following information regarding Black Company and Red Company to answer the question "Which amount is equal to Black Company's "days in inventory" for 2022 (to the closest decimal place) ?" $$\begin{array}{l}\begin{array} { | l | c | c | c | } \hline & \text { Year } & \begin{array} { c } \text { Inventory } \\\text { Turnover }\end{array} & \text { Ending Inventory } \\\hline \text { Black Company } & 2020 & & \$ 26,340 \\\hline & 2021 & 8.7 & \$ 29,890 \\\hline & 2022 & 8.4 & \$ 30,100 \\\hline\\\hline \text { Red Company } & 2020 & & \$ 25,860 \\\hline & 2021 & 7.0 & \$ 24,750 \\\hline & 2022 & 7.5 & \$ 22,530 \\\hline\end{array}\end{array}$$

• A)43.5 days
• B)52.1 days
• C)48.7 days
• D)42.0 days

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Definitions:

Cash Dividend

A payment of profits by a company to its shareholders, made in cash, as opposed to stock or other forms of payment.

Changes in Equity

Movements in shareholders' equity over a period due to profits, losses, dividends, and transactions with owners in their capacity as owners.

Fair Presentation

An accounting principle that financial statements should be honest, complete, and conform to accepted standards, providing a true and accurate view of an entity's financial position.