Mini-Exercise 11-2 Calculate activity measures The following information was ava
ID: 2499480 • Letter: M
Question
Mini-Exercise 11-2 Calculate activity measures The following information was available for the year ended December 31. 2013: Calculate the inventory turnover for 2013. (Round your answer to 2 decimal places.) Calculate the number of days sales in inventory for 2013. using year-end inventories. (Use 365 days a year. Round your answer to 1 decimal place.) Calculate the accounts receivable turnover for 2013. (Round your answer to 1 decimal place.) Calculate the number of days* sales in accounts receivable for 2013. using year-end accounts receivable. (Use 365 days a year. Round your answer to 1 decimal place.)Explanation / Answer
1. Inventory Turnover Ration = Cost of Goods sold / Average Inventory Inventory Turnover Ration = 602250/166000 3.628012 3.63 times 2.Number of day's sales in inventory = Year end inventories *365 / cost of goods sold Number of day's sales in inventory = 157575 *365/602250 95.5 days 3.Accounts Receivable Turnover = Net credit sales / Average Accounts Receivable Accounts Receivable Turnover = 821250/39100 Accounts Receivable Turnover = 21.0 times 4. No of days' sales in Account receivable = yearend accounts receivable*365 /cost of goods sold No of days's sales = 30400 *365/ 602250 18.4 days