Analysis of the Operating Cycle The following information was taken from the records of Dallen Company for the year 2010:

1. Compute the number of days’ sales in inventory.
2. Compute the ending balance in Accounts Receivable.
3. Compute the number of days’ purchases in accounts payable.
4. How many days elapse, on average, between the time Dallen must pay its suppliers for inventory purchases and the time Dallen collects cash from its customers for the sale of that same purchased inventory?
5. Repeat the computations in (1), (2), (3), and (4) using the end-of-year balance sheet balances rather than the average balances

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Sales Beginning inventory Ending inventory Beginning accounts receivable Average collection period Beginning accounts payable Ending accounts payable Gross profit percentage $600,000 $114,000 $87,000 $68,000 44 days $36,000 $42,000 37%