Accounts Receivable and Inventory Ratios Bell Company, whose current assets at December 31 are shown below, had net sales for the year of $956,000 and cost of goods sold of $558,900. At the beginning of the year, Bell's accounts receivable (net) were $161,000 and its inventory was $200,000. Cash $32,400 Short-term investments 55,000 Accounts receivable (net) 169,000 Inventory 200,000 Prepaid expenses 11,600 Current assets $468,000 Instructions: Round turnover ratios to two decimal places. Use rounded turnover ratios to compute respective days' ratios. Round days' ratios to the nearest whole number (day). a. What is the company's accounts receivable turnover for the year? Answer b. What is the company's average collection period for the year? Answer days c. What is the company's inventory turnover for the year? Answer
Accounts Receivable and Inventory Ratios Bell Company, whose current assets at December 31 are shown below, had net sales for the year of $956,000 and cost of goods sold of $558,900. At the beginning of the year, Bell's accounts receivable (net) were $161,000 and its inventory was $200,000. Cash $32,400 Short-term investments 55,000 Accounts receivable (net) 169,000 Inventory 200,000 Prepaid expenses 11,600 Current assets $468,000 Instructions: Round turnover ratios to two decimal places. Use rounded turnover ratios to compute respective days' ratios. Round days' ratios to the nearest whole number (day). a. What is the company's accounts receivable turnover for the year? Answer b. What is the company's average collection period for the year? Answer days c. What is the company's inventory turnover for the year? Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Bell Company, whose current assets at December 31 are shown below, had net sales for the year of $956,000 and cost of goods sold of $558,900. At the beginning of the year, Bell's accounts receivable (net) were $161,000 and its inventory was $200,000.
| Cash | $32,400 |
| Short-term investments | 55,000 |
| Accounts receivable (net) | 169,000 |
| Inventory | 200,000 |
| Prepaid expenses | 11,600 |
| Current assets | $468,000 |
Instructions:
- Round turnover ratios to two decimal places.
- Use rounded turnover ratios to compute respective days' ratios.
- Round days' ratios to the nearest whole number (day).
a. What is the company's accounts receivable turnover for the year?
Answer
b. What is the company's average collection period for the year?
Answer
days
c. What is the company's inventory turnover for the year?
Answer
d. What is the company's days' sales in inventory for the year?
Answer
days
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