The following information was available for the year ended December 31, 2019: Net sales...
Question:
The following information was available for the year ended December 31, 2019:
| Net sales | $1,076,750 |
| Cost of goods sold | 653,350 |
| Average accounts receivable for the year | 43,950 |
| Accounts receivable at year-end | 19,200 |
| Average inventory for the year | 222,000 |
| Inventory at year-end | 158,400 |
Required:
a. Calculate the inventory turnover for 2019.
b. Calculate the number of days' sales in inventory for 2019, using year-end inventories. (Use 365 days a year)
c. Calculate the accounts receivable turnover for 2019.
d. Calculate the number of days' sales in accounts receivable for 2019, using year-end accounts receivable.
Average Collection Period:
The average collection period pertains to the number of days before the accounts receivables will be collected. The shorter the collection period, the more favorable for the company as this will improve the cash flows.
Answer and Explanation: 1
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View this answera. The inventory turnover is computed by dividing the cost of goods sold by the average balance of inventories.
| Cost of goods sold (a) | 653,350 |
| Averag... |
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