Universal Calendar Company began the year with accounts receivable and inventory balances of $130,000 and $50,000, respectively. Year-end balances for these accounts were $150,000 and $30,000, respectively. Sales for the year of $400,000 generated a gross profit of $120,000.
Calculate the receivables and inventory turnover ratios for the year. (Round your answers to 2 decimal places.)
Receivables turnover ratio:
Inventory turnover ratio:
Solution
Receivables turnover ratio = net sales/average accounts recievable
=400000/((130000+150000)/2)
= 2.86 times
----------------------------------------------------------------------------------------------------------------------
Inventory turnover ratio = cost of goods sold/average inventory
=(400000-120000)/((50000+30000)/2)
= 7
.
General Principles of Intellectual Property: Concepts of Intellectual Proper...
Universal Calendar Company began the year with accounts receivable and.docx
1. Universal Calendar Company began the year with accounts receivable and inventory balances of
$130,000 and $50,000, respectively. Year-end balances for these accounts were $150,000 and
$30,000, respectively. Sales for the year of $400,000 generated a gross profit of $120,000.
Calculate the receivables and inventory turnover ratios for the year. (Round your answers to 2
decimal places.)
Receivables turnover ratio:
Inventory turnover ratio:
Solution
Receivables turnover ratio = net sales/average accounts recievable
=400000/((130000+150000)/2)
= 2.86 times
---------------------------------------------------------------------------------------------------------------------
-
Inventory turnover ratio = cost of goods sold/average inventory
=(400000-120000)/((50000+30000)/2)
= 7
