Balance Sheets As of December 31 2018 $404,000 2017 $376,000 Accounts receivable

Question

Balance Sheets As of December 31 2018 $404,000 2017 $376,000 Accounts receivable Allowance for doubtful accounts (20, 200) (15,040) Net accounts receivable Inventories, lower of cost or$482,500 $436,e0e market $383,800 $360,960 Income Statement For the Years Ended December 31 2018 2017 Net credit sales Net cash sales Net sales Cost of goods sold Selling, general, and administrative expenses Other expenses $2,008,000 $1,751,000 303,000 2,408,000 2,054,000 1,436,000 215,700 23,100 $1,887,500 $1,674,800 400,000 1,606,000 240,900 40,600 Total operating expenses

Explanation / Answer

a Accounts receivable turnover = Net Annual Credit Sales/Average Accounts Receivable = 2008000/((383800+360960)/2)= 5.39 times b Inventory turnover = Cost of goods sold/Average Inventory = 1606000/((482500+436000)/2)= 3.50 times c Net margin = Net sales/Net income = Net income/Net sales = (2408000-1887500)/2408000= 21.62%

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