Question

View Policies Current Attempt in Progress Lendell Company has these comparative balance sheet data: Lendell Company Balance Sheets December 31 2020 Cash $15.000 Accounts receivable (net) 70,000 Inventory 61,000 Plant assets (net) 195,000 $341,000 Accounts payable $50,000 Mortgage payable (15%) 101,500 Common stock, $10 par 144,000 Retained earnings 45.500 5341,000 2019 $ 30,000 59.000 49.000 179.000 $317.000 $60.900 101.500 118.500 36.100 $317.000 Additional information for 2020: 1 2 3. - 5. Net income was $25.800. Sales on account were $407,700. Sales retums and allowances amounted to $20.700. Cost of goods sold was 5198,000. Net cash provided by operating activities was $45.300 Capital expenditures were $24.400 and cash dividends were $9.800. Compute the following ratios at December 31, 2020. (Round current ratio to 2 decimal places eg. 1.67. Round Accounts receivable turnover, Average collection period, Inventory turnover and Days in Inventory to 1 decimal place es 16) a) Current ratio 1 b) Accounts receivable turnover times Average collection period days id) Inventory tumover times le) Days in inventory days in Free cash flow $ Texthink and Media

Answer 1

a
Total Current assets	146000	=15000+70000+61000
Divide by Total Current liabilities	50000
Current ratio	2.92
b
Net sales	387000	=407700-20700
Divide by Average Accounts Receivable	64500	=(70000+59000)/2
Accounts Receivable turnover	6.0
c
Average collection period	60.8	=365/6
d
Cost of goods sold	198000
Divide by Average Inventory	55000	=(61000+49000)/2
Inventory Turnover	3.6
e
Days in inventory	101.4	=365/3.6
f
Net cash provided by operating activities	45300
Less: Capital expenditures	24400
Less: Dividends	9800
Free cash flow	11100