This is an opportunity to work with Accounts Receivable, Inventory, and Accounts Payable. These notions are from about pages 194 to 197. With any problem statement we operate with whatever data is given. While the ideal would be that sales is subdivided between credit sales and cash sales, like in this problem, if we only have total sales, then we use total sales in the accounts receivable turnover. Also, feel free to use years of 360 rather than 365. That should never make a difference in the right-ness or wrong-ness of your response. Accounts Receivable Turnover = Net credit sales / Average accounts receivable Days Accounts Receivable outstanding 365/Accounts Receivable Turnover Inventory Turnover Cost of goods sold / Average inventory Days Inventory held = 365/ Inventory Turnover Accounts Payable Turnover Inventory Purchases/Average accounts payable Days Accounts Payable outstanding 365/Accounts payable turnover Operating cycle Days in receivables + Days in inventory You can see that the operating cycle is the time from purchase of inventory from the vendor to collection of cash from the customer. Cash conversion cycle operating cycle-days accounts payable outstanding Selected data of Islander Company follow: 2022 Accounts receivable $500,000 As of December 31, 2021 $470,000 Allowance for doubtful accounts <25,000 > <20,000 > Net accounts receivable $475,000 $450,000 Inventories lower of cost or market $600,000 $550,000 Accounts payable Net credit sales Net cash sales Net sales Cost of goods sold Selling, general, and administrative expenses Other Total operating expenses $400,000 $360,000 Year Ended December 31, 2022 2021 $2,500,000 $2,200,000 500.000 400.000 $3,000,000 $2,600,000 $2,200,000 $1,800,000 300,000 270,000 50.000 30.000 $2,350,000 $2,100,000 Required: 1. What is the Accounts Receivable Turnover? 2. What is the Days Accounts Receivable Outstanding? 3. What is the Inventory Turnover? 4. What is the Days Inventory held? 5. What is the Accounts Payable Turnover? 6. What is the Days Accounts Payable Outstanding? 7. What is the Operating Cycle? 8. What is the Cash Conversion Cycle