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TEW COMPANY Balance Sheet As of December 31 ASSETS Cash$20,000 Accounts receivable 80,000 Inventory 50,000 Net plant and equipment 250,000 Total assets$400,000 LIABILITIES AND STOCKHOLDERS

TEW COMPANY

Balance Sheet

As of December 31

ASSETS

Cash$20,000

Accounts receivable 80,000

Inventory 50,000

Net plant and equipment 250,000

Total assets$400,000

LIABILITIES AND STOCKHOLDERS EQUITY

Accounts payable$40,000

Accrued expenses 60,000

Long-term debt 130,000

Common stock 100,000

Paid-in capital 10,000

Retained earnings 60,000

Total liabilities and stockholders equity$400,000

TEW COMPANY

Income Statement

For the year ended December 31

Sales (all on credit)$500,000

Cost of goods sold 200,000

Gross profit$300,000

Sales and administrative expenses 20,000

Fixed lease expenses 10,000

Depreciation 40,000

Operating profit$230,000

Interest expense 20,000

Profit before taxes$210,000

Taxes (35%) 73,500

Net income$136,500

Refer to the tables above. The firm's inventory turnover ratio is ____.

Multiple Choice

8x

10x

2.7x

0.1x

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