Homework Answers
Accounts receivable turnover = Credit sales/ Average accounts receivable
=$440,000/[($38,648+$50,600)/2]
=$440,000/$45,124
=9.75
Average days to collect receivables =365/ accounts receivable turnover
=365/9.75
=37.43 days
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Notes payable (short-term)
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Receivables
$109,800
Accounts payable
32,000
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261,800
Prepaid insurance
8,100
Retained earnings
141,000
Land
20,200
Equipment (net)
150,800
$489,900
$489,900
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INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
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Cost of goods sold
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Purchases
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BALANCE SHEET
DECEMBER 31, 2020
Cash
$44,900
Notes payable (short-term)
$50,000
Receivables
$109,800
Accounts payable
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