Computing Selected Ratios
Sales for the year were $1,000,000, of which half was on credit. The average gross profit rate was 50 percent on sales. Account balances follow:
| Beginning | Ending |
Accounts receivable (net) | $45,000 | $60,000 |
Inventory | 70,000 | 25,000 |
Required:
Compute the turnover for the accounts receivable and inventory, the average age of receivables, and the average days' supply of inventory.
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