Question Details

Receivables turnover and the average collection period



Ex. 1
Selected data for Mary's Store appear below.
2002 2001
Net sales $800,000 $520,000
Cost of goods sold 600,000 345,000
Inventory at end of year 65,000 85,000
Accounts receivable at end of year 90,000 70,000
Instructions
Compute the following for 2002:
(a) Gross profit percentage.
(b) Inventory turnover.
(c) Receivables turnover.
Ex. 2
Walbeck Corporation has issued common stock only. The company has been successful and has
a gross profit rate of 20%. The information shown below was taken from the company's financial
statements.
Beginning inventory $ 482,000
Purchases 4,836,000
Ending inventory ?
Average accounts receivable 800,000
Average common stockholders' equity 3,500,000
Sales (all on credit) 6,000,000
Net income 420,000
Instructions
Compute the following:
(a) Receivables turnover and the average collection period.
(b) The inventory turnover and the average days in inventory.
(c) Return on common stockholders' equity.




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