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 Ending $7,500 6,825 Beginning $6,100 6,305 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.)
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 Ending $7,500 6,825 Beginning $6,100 6,305 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Urmila ben
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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