During 2024 , credit sales and cost of goods sold were $176,715 and $107,200, respectively. The 2023 and 2022 credit sales were $192,885 and $195,415, respectively, and the cost of goods sold for the same periods were $102,180 and $105,465, respectively. The accounts receivable and inventory balances at the end of 2021 were $8,800 and $109,000, respectively. (a1) Using the above data, calculate the following ratios: (Round receivables turnover ratio and average collection period to 1 decimal place, e.g. 15.2, days to sell inventory to 0 decimal places, e.g. 152 and all other answers to 2 decimal places, e.g. 15.25. Use 365 days for calculation.) \begin{tabular}{|c|c|c|c|} \hline & Dec. 31, 2024 & Dec. 31, 2023 & Dec. 31, 2022 \\ \hline \multicolumn{4}{|l|}{ Current assets } \\ \hline Cash & $11,000 & $38,500 & $34,700 \\ \hline Accounts receivable & 16,500 & 13,200 & 9,900 \\ \hline Inventory & 186,000 & 134,000 & 128,000 \\ \hline Prepaid expenses & 6,600 & 8,800 & 7,200 \\ \hline Total current assets & $220,100 & $194,500 & $179,800 \\ \hline \multicolumn{4}{|l|}{ Current liabilities } \\ \hline Accounts payable & $68,200 & $51,700 & $36,300 \\ \hline Salaries payable & 4,600 & 6,400 & 4,200 \\ \hline Income tax payable & 1,300 & 1,300 & 2,100 \\ \hline Total current liabilities & $74,100 & $59,400 & $42,600 \\ \hline \end{tabular} 2024 2023 2022 a. Current ratio :1 :1 :1 b. Quick ratio :1 :1 :1 Receivables c. turnover times times times ratio Average collection days days days period Inventory d. turnover times times times ratio Days to sell inventory days days days Martin Avenue Tire Company has been operating in Winnipeg for more than 30 years and has a very loyal customer base. The company sells and installs tires and the owners pride themselves on the excellent business relationships they have developed with both their customers and suppliers. The company often sells tires on credit, allowing customers to pay their balances within 30 days. Collection of accounts receivable has never been a problem, with most people paying their balances within 60 days. Martin Avenue purchases tires from most of the large national brands and, due to the nature of the business, generally maintains a fairly large inventory. It is essential that the company have the necessary tires on hand to meet customer needs due to increased competition from large retailers such as Canadian Tire and Walmart. The company has always had sufficient cash to pay its suppliers immediately and take advantage of cash discounts. However, this month, for the first time ever, Martin Avenue does not have sufficient cash in the bank to meet its supplier payments. Chris Martin, son of the original owner, Ernest Martin, is currently operating the business and is very concerned about the company's inability to maintain what he feels are adequate levels of cash. Your firm has been the accountants for Martin Avenue Tire Company for the past 20 years. Chris has approached the firm expressing his concerns and asking for advice on how to solve the cash flow problems. As part of your analysis, you review the company's financial statements for the past three years. Excerpts from the financial statements are presented below
