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Richards & James is a multinational corporation that manufactures and markets many household products. Last year, sales for the company were $71,000 (all amounts in millions). The annual report did not disclose the amount of credit sales, so we will assume that 90 percent of sales were on credit. The average gross profit on sales was 45 percent. Additional account balances were: Accounts receivable (net) Inventory Accounts receivable Inventory Ending $7,500 6,825 Required: 1. Compute Richards & James' receivable turnover ratio and its inventory turnover ratio. (Round intermediate calculations to the nearest whole dollar. Round your answers to 2 decimal places.) Turnover Beginning $6,100 6,305

Richards & James is a multinational corporation that manufactures and markets many household products. Last year, sales for the company were $71,000 (all amounts in millions). The annual report did not disclose the amount of credit sales, so we will assume that 90 percent of sales were on credit. The average gross profit on sales was 45 percent. Additional account balances were: Accounts receivable (net) Inventory Accounts receivable Inventory Ending $7,500 6,825 Required: 1. Compute Richards & James' receivable turnover ratio and its inventory turnover ratio. (Round intermediate calculations to the nearest whole dollar. Round your answers to 2 decimal places.) Turnover Beginning $6,100 6,305

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Richards & James is a multinational corporation that manufactures and markets many household products. Last year, sales for the company were $71,000 (all amounts in millions). The annual report did not disclose the amount of credit sales, so we will assume that 90 percent of sales were on credit. The average gross profit on sales was 45 percent. Additional account balances were: Accounts receivable (net) Inventory Accounts receivable Inventory Required: 1. Compute Richards & James' receivable turnover ratio and its inventory turnover ratio. (Round intermediate calculations to the nearest whole dollar. Round your answers to 2 decimal places.) Ending $7,500 6,825 Turnover To collect accounts receivable To sell inventory Beginning $6,100 6,305 2. How many days does it take for the company to collect its accounts receivable and sell its inventory? (Use 365 days in a year. Round your answers to 2 decimal places.) Days
Transcribed Image Text:Richards & James is a multinational corporation that manufactures and markets many household products. Last year, sales for the company were $71,000 (all amounts in millions). The annual report did not disclose the amount of credit sales, so we will assume that 90 percent of sales were on credit. The average gross profit on sales was 45 percent. Additional account balances were: Accounts receivable (net) Inventory Accounts receivable Inventory Required: 1. Compute Richards & James' receivable turnover ratio and its inventory turnover ratio. (Round intermediate calculations to the nearest whole dollar. Round your answers to 2 decimal places.) Ending $7,500 6,825 Turnover To collect accounts receivable To sell inventory Beginning $6,100 6,305 2. How many days does it take for the company to collect its accounts receivable and sell its inventory? (Use 365 days in a year. Round your answers to 2 decimal places.) Days
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