Question

Based on the comparative income statement and balance sheet or Cowakichen Counters, Inc. Comparative Income Statement For Year Ended December 31, 20-2 and 20-1 Net Sales ( c Cost of goods sold ) 52.584,000 1168.200 $715,000 $2,163,000 1,616,000 $546,200 231,000 24,200 Gross profit 24,200 expense (int) $199,600 $199.900 Cowan Kitchen Counters, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 $255,400 Government notes Accounts receivable (net) Merchandise inventory Supplies and prepayments Land Bulding (net) Omequipment (net) Total assets 903.500 983/500 143,200 108.200 330,000 $243.200 250,000 797,500 913,500 47,500 108,200 390.600 $2,991,600 2,765,600 Current abilities (accounts payable) Bonds payable Total liabilities $703,000 220,000 $923,000 $532,000 240,000 $772,000 $1,800,000 Common stock (510 par, 180,000 shares) $1,800,000 Retained earnings 20600 Total stockholders' equity $7,068.600 Totabilities and stockholders' uity $2.991.600 $1.993.600 $2.765.000 Page 2 of 2 e 365 Compute the following activity measures for 20-2 (round all calculations to two decimal places) days when computing the accounts receivable and merchandise inventory turnover. a. Accounts receivable turnover days b. Merchandise inventory turnover days C. Asset turnover Accounts Receluddle Tumouer net Sales or account Cuenage accounts Receivable Cheb). 2,534.000 (903,5.00 707260)/2 958.000 850,500

Answer 1

(0) Accounts Receivable Turnover in Days : - = 365 Accounts Receivable Turnover Ratio Accounts Receivable Turnover Ratio = Net sales on account Avencege Accounts Receivable - $2584000 $903500 + $797500 = $2584000 = 1.98 $ 1302250 Accounts Receivable Turnover in Days = 365 = 184.34 1.98 b) Merchandise liveatory Turnover in Days = Average Merchandise ewentory cost of goods sold U x 365 - $983600+ $913600 -X 365 $ 1 8 68200 = $1440400 x 365 $ 1 868200 - 281.41

(c) Asset Turnover - Net sales Average Total Assets = $2584000 $2991600 + $2765600 - $2584000 $ 437 4400 = 0.60