Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Inverness Steel Corporation is a producer of flat - rolled carbon, stainless and electrical steels, and tubular products. The company's income statement for the 2

Inverness Steel Corporation is a producer of flat-rolled carbon, stainless and electrical steels, and tubular products. The company's income statement for the 2024 fiscal year reported the following information ($ in millions):
Sales $ 6,800
Cost of goods sold 5,800
The company's balance sheets for 2024 and 2023 included the following information ($ in millions):
20242023
Current assets:
Accounts receivable, net $ 716 $ 616
Inventories 925842
The statement of cash flows reported bad debt expense for 2024 of $9 million. The summary of significant accounting policies included the following notes ($ in millions):
Accounts Receivable (in part)
The allowance for uncollectible accounts was $11 and $8 at December 31,2024 and 2023, respectively. All sales are on credit.
Inventories
The cost of the majority of inventories is measured using the last-in, first-out (LIFO) method. Other inventories are measured principally at average cost and consist mostly of foreign inventories and certain raw materials. If the entire inventory had been valued on an average cost basis, inventory would have been higher by $540 and $390 at the end of 2024 and 2023, respectively.
During 2024,2023, and 2022, liquidation of LIFO layers generated income of $7, $8, and $26, respectively.
Required:
Determine the amount of accounts receivable Inverness wrote off during 2024.
Note: Enter your answer in millions.
Calculate the amount of cash collected from customers during 2024.
Note: Enter your answer in millions.
Calculate what cost of goods sold would have been for 2024 if the company had used average cost to value its entire inventory.
Note: Enter your answer in millions.
Calculate the receivables turnover ratio, the inventory turnover ratio, and the gross profit ratio for 2024.
Note: Round "Receivables turnover ratio" and "Inventory turnover ratio" answers to 2 decimal places. Round "Gross profit ratio" answer to nearest percent (i.e.,0.123 needs to be entered as 12%).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Financial Accounting A Guide For Non-specialists

Authors: Jimmy Winfield, Mark Graham, Taryn Miller

1st Edition

0198847270, 9780198847274

More Books

Students also viewed these Accounting questions

Question

Identify the costs likely to be associated with stress at work.

Answered: 1 week ago