Answered: stock turnover period

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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Question

The trading account of Calypso Ltd for the year ended 30 June 2005 is set out below:

£ £

430,000

Sales

Opening stock 50,000

Purchases 312,500

362,500

Closing stock 38,000

Cost of sales 324,500

Gross profit 105,500

The following amounts have been extracted from the company’s balance sheet at

30 June 2005.

Trade debtors 60,000

Prepayments 4,000

Cash in hand 6,000

Bank overdraft 8,000

Trade creditors 40,000

Accruals 3,000

Proposed dividends 5,000

In the questions that follow assume a year to be 365 days and ignore VAT.

35 Calculate the stock turnover period of Calypso Ltd in days.

A 33 days

B 17 days

C 49 days

D 51 days

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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