The Following Balance Sheet Information Is Provided for Patton Company

question 119

Multiple Choice

The following balance sheet information is provided for Patton Company: $\begin{array}{l}\begin{array}{|l}\hline \text { Assets}\\\hline \text { Cash}\\\hline \text { Accounts receivable}\\\hline \text { Inventory}\\\hline\end{array}\begin{array}{r|}\hline 2014 \\\hline \$ \quad 4,000 \\\hline 15,000 \\\hline \$ \quad 35,000\\\hline \end{array}\begin{array}{r|}\hline 2013 \\\hline \$ \quad2,000 \\\hline 12,000 \\\hline \$ \quad 38,000\\\hline \end{array}\end{array}$ Assuming Year 2 cost of goods sold is $730,000,what is the company's average days to sell inventory? (Use 365 days in a year.Do not round your intermediate calculations. )

• A) 17.5 days
• B) 18.25 days
• C) 19 days
• D) 20.86 days

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Definitions:

Demand

The consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service.

Price Elastic

Describes a situation where the quantity demanded or supplied of a good or service changes significantly due to changes in its price. Highly elastic means a small price change makes a big difference in demand or supply.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a particular price.

Chocolate

A sweet, typically brown food preparation of Theobroma cacao seeds, roasted and ground, often flavored, as with vanilla, and used as a confection or as a flavoring ingredient.