Sales for the year were $1,000,000, half of which were on credit. The average gross profit rate

Question:

Sales for the year were $1,000,000, half of which were on credit. The average gross profit rate was 50 percent on sales. Account balances follow:
Beginning Ending
Accounts receivable (net) $45,000 $60,000
Inventory 70,000 25,000
Required:
Compute the turnover for the and inventory, the average age of receivables, and the average days’ supply of inventory.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...