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Cornerstone Exercise 12-48 (Algorithmic) Horizontal and Vertical Analysis Selected data from the financial statements of Jones Hardware Company follows. 2019 2018 Accounts receivable $52,700 $38,000

  1. Cornerstone Exercise 12-48 (Algorithmic) Horizontal and Vertical Analysis

    Selected data from the financial statements of Jones Hardware Company follows.

    2019 2018
    Accounts receivable $52,700 $38,000
    Merchandise inventory 13,400 16,000
    Total assets 450,000 380,000
    Net sales 380,000 270,000
    Cost of goods sold 182,000 210,000

    Required:

    1. Calculate by how much accounts receivable, merchandise inventory, total assets, net sales, and cost of goods sold increased or decreased in dollar terms from 2018 to 2019.

    Accounts receivable $
    • increase
    • decrease
    Merchandise inventory $
    • increase
    • decrease
    Total assets $
    • increase
    • decrease
    Net sales $
    • increase
    • decrease
    Cost of goods sold $
    • increase
    • decrease

    2. Indicate what happened from 2018 to 2019 to accounts receivable and merchandise inventory as a percentage of total assets. Round to the nearest whole percent.

    Accounts receivable
    • decreased
    • increased
    from % in 2018 to % in 2019.
    Merchandise inventory
    • decreased
    • increased
    from % in 2018 to % in 2019.

    Indicate what happened from 2018 to 2019 to cost of goods sold as a percentage of net sales (rounded to the nearest whole percent).

    Cost of goods sold

    • decreased
    • increased
    from % in 2018 to % in 2019.

  2. Cornerstone Exercise 12-52 (Algorithmic) Asset Efficiency Ratios

    Selected financial statement numbers for Rutherford Company follow.

    Net sales $272,800
    Cost of goods sold 179,000
    Average accounts receivable 20,730
    Average inventory 4,145
    Average property, plant, and equipment 75,705
    Average total assets 126,127

    Required:

    Round your answers to two decimal places.

    1. Using this information, calculate Rutherford's receivable turnover ratio.

    2. Using this information, calculate Rutherford's asset turnover ratio and also convert the ratio into days (rounded to the nearest whole day).

    Asset turnover ratio
    Conversion into days days

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