Accounts receivable turnover, inventory turnover, and net margin Selected data f
ID: 2497304 • Letter: A
Question
Accounts receivable turnover, inventory turnover, and net margin
Selected data from Komar Company follow.
Compute the accounts receivable turnover for 2014. (Round your answer to 2 decimal places.)
ACCOUNTS RECEIVABLE TURNOVER ( ) times
b. Compute the inventory turnover for 2014. (Round your answer to 2 decimal places.)
INVENTORY TURNOVER ( ) times
c. Compute the net margin for 2013. (Round your answer to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
NET MARGIN ( ) %
Balance SheetAs of December 31 2014 2013 Accounts receivable $ 396,000 $ 373,000 Allowance for doubtful accounts (19,800 ) (14,920 ) Net accounts receivable $ 376,200 $ 358,080 Inventories, lower of cost or market $ 482,000 $ 446,000
Explanation / Answer
a.
Calculation of accounts receivable turnover for 2014:
Net Credit Sales for 2014 (A)
$ 2,018,000
Average Net accounts receivable = (376200+358080) /2 (B)
$ 367,140
Accounts receivable turnover for 2014 = A/B
5.50
times
b.
Calculation of inventory turnover for 2014:
Cost of Good sold for 2014 (A)
$ 1,592,000
Average Inventory = (482000 + 446000) /2
$ 464,000
Inventory turnover for 2014
3.43
times
c.
Calculation of net margin for 2013:
Net sales (A)
$ 2,068,000
Less: Total operating expenses
$ (1,657,300)
Net Margin (B)
$ 410,700
Net Margin % = A / B
19.86%
a.
Calculation of accounts receivable turnover for 2014:
Net Credit Sales for 2014 (A)
$ 2,018,000
Average Net accounts receivable = (376200+358080) /2 (B)
$ 367,140
Accounts receivable turnover for 2014 = A/B
5.50
times
b.
Calculation of inventory turnover for 2014:
Cost of Good sold for 2014 (A)
$ 1,592,000
Average Inventory = (482000 + 446000) /2
$ 464,000
Inventory turnover for 2014
3.43
times
c.
Calculation of net margin for 2013:
Net sales (A)
$ 2,068,000
Less: Total operating expenses
$ (1,657,300)
Net Margin (B)
$ 410,700
Net Margin % = A / B
19.86%