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ID: 2546993 • Letter: D
Question
dit View History Bookmarks Window Help Wikipeda Facebook The w Connect 13 Problems Saved Cash Accounts receivable Note receivable, due 2020 Merchandise inventory Prepaid insurance Suppliea Equipaent Accumulated depreciation, equipment Note payable to bank, due 2020 Accounts payable Interest payable Sales Sales discounts Coat of goods sold $ 33,340 47,700 9,500 35,700 2,350 1,410 43,500 23,500 35,000 13,050 350 535,000 3,200 348,540 Accounts Receivable at December 31, 2018, was $52,550. Merchandise inventory at December 31, 2018, was $58,500 account balances above, calculate the following: a. The gross profit percentage. b. Working capital c. The current ratio. d. The inventory turnover e. The accounts receivable turnover. All sales were on credit. Complete this question by entering your answers in the tabs below. Required a Required b Required c Required d Required e The gross profit percentage. Choose Denominator s Profit P Prev 70t 711 NextExplanation / Answer
a, b, & c.
Calculate gross profit percentage, working capital, and current ratio as follows:
d.
Inventory turnover
= Cost of goods sold/Average inventory
= $348,540/[($35,700+$58,500)/2]
= $348,540/$47,100
= 7.4
e.
Accounts receivable turnover
= Net credit sales/Average accounts receivable
= $531,800/[($47,700+$52,550)/2]
= $531,800/$50,125
= 10.61
Sales 535000 Less: Sales discounts 3200 Net sales (A) 531800 Less: Cost of goods sold 348540 Gross profit (B) 183260 Gross profit percentage (B/A)*100 34.46% Current Assets: Amount Cash 33340 Accounts receivable 47700 Note receivable, due 2020 9500 Merchandise inventory 35700 Prepaid insurance 2350 Supplies 1410 Total current assets (A) 130000 Current Liabilities: Amount Note payable to bank, due 2020 35000 Accounts payable 13050 Interest payable 350 Total current liabilities (B) 48400 Working capital (A - B) 81600 Current ratio (A/B) 2.69Related Questions
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