Accounts Receivable and Inventory Ratios

Ritter Company, whose current assets at December 31 are shown below, had net sales for the year of $850,000 and cost of goods sold of $550,000. At the beginning of the year, Ritters accounts receivable (net) were $160,000 and its inventory was $175,000.

Cash	$32,000
Short-term investments	49,300
Accounts receivable (net)	170,000
Inventory	200,000
Prepaid expenses	11,600
Current assets	$462,900

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 companys accounts receivable turnover for the year? b. What is the companys average collection period for the year? c. What is the companys inventory turnover for the year? d. What is the companys days sales in inventory for the year?