Question

Richard & James is a multination corporation that manufactures and markets many household products. Last year, sales for the company were $77,000( all amounts in million). The annual report did not disclose the amount of credit sales, so we will assume that 80% of sales were on credit. The average gross profit sales was 50 percent. Additional account balance were.

                                                     Ending                                       Beginning

Account receivable (net)          $6,700                                      $5,900

Inventory                                       6,822                                         6.305

1. Compute Richard & James receivable turnover ratio and its inventory turnover ratio

Round intermediate calculations to the nearest whole dollar Round your answer to 2 decimal places).

                                                 Turnover

a. Account receivable

b. Inventory

Answer 1

Total sales Credit sales Gross Prosit – $77,000 = 77,000 × 80% = $61,600 = 50% on sales. = 50%.x 77,000 38,500 sold sales - Gross Profit = $77,000 - 38500 - $38,500 Cost of good a) Account receivable turnoree I Met credit sales Average accounts receivables $61,600 → ($6.700 + $5,900) = 9.78 times ] b) Inventory turnover a cost of goods sold Average arou inventory $38/500 ($6822+6305) 9 - 15.87 times) 15-87 times)