1 $ 25,172 $ 29,424 $ 30, 344 51,600 51,000 Cash 89,600 112,5e0 8 Prepaid expens
ID: 2404408 • Letter: 1
Question
1 $ 25,172 $ 29,424 $ 30, 344 51,600 51,000 Cash 89,600 112,5e0 8 Prepaid expenses 8,106 191,270 185, 552 170,184 426,648 367,80e s 386,580 Liabilities and Equity Accounts payable s 186,235 s 62,158 s 48,458 by Print on plant assets Common stock, $1e par value 80,218 84, 594 67,737 162,580 162,56 162,580 35,885 s 426,648 $ 367,880 $386,580 Total liabilities and equity The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on 2817 s 437,682 Cost of goods sold Other operating expenses s 338,332 171,939 $ 284,493 18,867 5,565 7,218 Incose taxes Total costs and expenses Net incone 526,918 s 25,823Explanation / Answer
Answer 1.
Days’ Sales Uncollected = Accounts Receivable / Net Sales * 365
2016:
Days’ Sales Uncollected = $62,600 / $437,682 * 365
Days’ Sales Uncollected = 52.20 days
2017:
Days’ Sales Uncollected = $89,600 / $554,642 * 365
Days’ Sales Uncollected = 58.96 days
Answer 2.
Accounts Receivable Turnover = Net Sales / Average Accounts Receivable, net
2016:
Average Accounts Receivable, net = ($62,600 + $51,600) / 2
Average Accounts Receivable, net = $57,100
Accounts Receivable Turnover = $437,682 / $57,100
Accounts Receivable Turnover = 7.67
2017:
Average Accounts Receivable, net = ($89,600 + $62,600) / 2
Average Accounts Receivable, net = $76,100
Accounts Receivable Turnover = $554,642 / $76,100
Accounts Receivable Turnover = 7.29
Answer 3.
Inventory Turnover = Cost of Goods Sold / Average Inventory
2016:
Average Inventory = ($82,500 + $51,000) / 2
Average Inventory = $66,750
Inventory Turnover = $284,493 / $66,750
Inventory Turnover = 4.26
2017:
Average Inventory = ($112,500 + $82,500) / 2
Average Inventory = $97,500
Inventory Turnover = $338,332 / $97,500
Inventory Turnover = 3.47
Answer 4.
Days’ Sales in Inventory = Inventory / Cost of Goods Sold * 365
2016:
Days’ Sales in Inventory = $82,500 / $284,493 * 365
Days’ Sales in Inventory = 105.85 days
2017:
Days’ Sales in Inventory = $112,500 / $338,332 * 365
Days’ Sales in Inventory = 121.37 days
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