Question
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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