Question

The 2021 income statement of Anderson Medical Supply Company reported net sales of $12 million, cost of goods sold of $6.5 million, and net income of $885,000. The following table shows the company's comparative balance sheets for 2021 and 2020 ($ in thousands) 2021 2020 $ 640 $ 720 1.0406 70 1.250 1.160 4,100 3,820 $7,030 $6,370 Assets Cash Accounts receivable Inventory Property, plant, and equipment (net) Total assets Liabilities and shareholders' equity Current liabilities Bonds payable Common stock Retained earnings Total liabilities and shareholders' equity $1,300 2.050 2,700 980 $7,030 $1,170 2.050 2,700 450 $6,370 Required: 1. Calculate Anderson's turnover ratios for 2021. (Use 365 days a year. Round your answers to 2 decimal places.) Inventory turnover ratio times imes Receivables tumour ratio Itimas < Prev 5 of 6 !!! Next >

Answer 1

NI Inventory Turnover Ratio Receivables Turnover Ratio Average collection Period (Asset Turnover Ratio 5.39 14.04 26.00 [1.79 ] times times ] days times Calculation. (as Inventory Turnover Ratio = Cost of Goods sold & Average Inventory firstly, we will calculated average inventory Average sneventory - [(Beginning Inventory + Ending Inventory) - 2] = {#1160,000 + $ 1,250,000) 4 2] = $2,410,000 = 2 = $ 1,205,000 Inventory turnover Ratio = $6,500,000 - $1,205,000 = 5.39 times bo Receivables turnover Ratio =. Net sales Average Accounts Receivable firstly, we will calculate average accounts receivable Average Accounts Receivable = [(Beginning Accounts Receivable +Ending Accounte Receivable) + 2]

Average Accounts Receivable = ($ 670,000+ $1,040,000) #2) - $1,710,000 & 2 i $855,000 Receivables turnover Ratio a $12,000,000 & $855,000 = 14.04 times C Average collection Period = 365 days Accounts Receivable Yumover = 365 days ↑ 14004 = 26 days (d) Asset turnover Ratio = (Net sales & Average total Assets) Average total Amets = (Beginning total Assets + Ending total Assets) = 2] +($ 6,370,000 + $ 7,030,000) = 2] = $13,400,000 = 2 = $6,700,000 Asset Turnover Ratie & $ 12,000,000 - $6,700,000 - 1.79 times