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Accounting Principles Volume 2
Selected financial data for Shumway Ltd. are shown below. Instructions

Selected financial data for Shumway Ltd. are shown below. Instructions a. Calculate the following ratios for each

Question:

Selected financial data for Shumway Ltd. are shown below.

Instructions

a. Calculate the following ratios for each of 2024 and 2023:

1. Receivables turnover

2. Collection period

3. Inventory turnover

4. Days sales in inventory

5. Operating cycle

b. Based on the ratios calculated in part (a), what conclusion(s) can be drawn about the management of the receivables and inventory?

Transcribed Image Text:

Net sales Cost of goods sold Accounts receivable (gross) Inventory 2024 2023 $6,420,000 $6,240,000 4,540,000 4,550,000 850,000 1,020,000 750,000 980,000 2022 $5,430,000 3,950,000 650,000 840,000

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a 1 and 2 3 and 4 5 Operating cycle Days sales in inventory Collection period 2024 127 days 81 days ...View the full answer

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Accounting Principles Volume 2

ISBN: 9781119786634

9th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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Question Posted: Feb 01, 2023 01:22 AM

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