Question

Brief Exercise 220 Selected data for Buechner Corporation appear below. 2017 2016 Net credit sales $630,000 $520,000 Cost of goods sold 409,500 312,000 Inventory at the end of year 64,000 85,000 Accounts receivable at end of year 90,000 50,000 Compute gross profit percentage for 2017. (Round answer to 0 decimal places, e.g. 25%) Gross profit percentage Compute the inventory turnover for 2017. (Round answer to 1 decimal place, e.g. 5.1) times Inventory turnover Compute accounts receivable turnover for 2017. (Round answer to o decimal places, e.g. 5) Accounts receivable turnover times Question Attempts: 0 of 1 used

Answer 1

A)

Gross Profit Percentage

35%

1)Gross Profit :

= Sales - Cost of good sold

= $ 630,000 - $ 409,500

= $220,500

2) Gross Profit Percentage:

= $ 220,500 ÷ $630,000 × 100%

= 35%

B)

Inventory Turnover

5.5 Times

= Cost of good sold ÷ Average inventories

= $409,500 ÷ ( $64,000 + $85000/2)

= $ 409,500 ÷ $ 74,500

= 5.5 times

C)

Account Receivable Turnover

9 times

= Net Credit Sales ÷ Average Account Receivable

= $ 630,000 ÷ ( $90,000 + $50,000/2)

= $630,000 ÷ $ 70,000

= 9 times