7. When days sales uncollected increases, the companys accounts receivable increases. Because accounts receivables are a current asset and the current asset has increased, how could this reduce the companys liquidity?

8. Assume that a company has receivables of $800,000, inventory of $900,000, net sales of $9,000,000, cost of goods sold of $7,000,000 and net profit of $100,000. Calculate its days sales uncollected using a 360-day year.

a. 25.6 days.

b. 32.0 days.

c. 75.5 days

d. There is insufficient information to compute the collection period.

9. Assume that a company has receivables of $800,000, inventory of $900,000, net sales of $9,000,000, cost of goods sold of $7,000,000 and net profit of $100,000. Calculate its collection period using a 360- day year. Compute the companys inventory turnover (with the sales formula).

a. 10.0 times.

b. 9.0 times.

c. 11.5 times

d. There is insufficient information to compute the inventory turnover.