Question
Accounts Receivable and Inventory Ratios Bell Company, whose current assets at December 31 are shown below, had net sales for the year of $956,000 and
Accounts Receivable and Inventory Ratios Bell Company, whose current assets at December 31 are shown below, had net sales for the year of $956,000 and cost of goods sold of $558,900. At the beginning of the year, Bell's accounts receivable (net) were $161,000 and its inventory was $200,000.
Cash | $32,400 |
Short-term investments | 55,000 |
Accounts receivable (net) | 169,000 |
Inventory | 200,000 |
Prepaid expenses | 11,600 |
Current assets | $468,000 |
Instructions:
- Round turnover ratios to two decimal places.
- Use rounded turnover ratios to compute respective days' ratios.
- Round days' ratios to the nearest whole number (day).
a. What is the company's accounts receivable turnover for the year? ____ b. What is the company's average collection period for the year? ____ days c. What is the company's inventory turnover for the year? ____ d. What is the company's days' sales in inventory for the year? ____ days
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