Answer:
Determination of the following:
1a. Accounts receivable turnover _____ 30.4 x
b. Number of days' sales in receivables _____ 12 days
2a. Inventory turnover _____ 52.1x
b. Number of days' sales in inventory _____ 7 days
Explanation:
a) Data and Calculations:
Company A:
Net sales = $1,200,000
Average accounts receivable (net) = $100,000
Accounts receivable turnover = Net sales/Average accounts receivable
= $100,000/$1,200,000 * 365
= 30.4x
Number of days' sales in receivables = Number of days in the period/Accounts receivable turnover
= 365/30.4 = 12 days
Inventory Turnover = Average inventory /Cost of goods sold * 365
= $90,000/$630,000 * 365
= 52.1x
Number of days' sales in inventory = Number of days in the period/Inventory Turnover
= 365/52.1
= 7 days
Answer:
F. $500
Explanation:
At the end of the period, accounts receivable balance of $40,000
Bad debts are estimated: 2% x $40,000 = $800
Before adjusting, allowance for doubtful accounts balance of $300 (credit) and the company uses the allowance method to account for bad debts. Therefore,
Bad debts expense = $800 - $300 = $500
The entry will be made:
Debit Bad debts expense $500
Credit Allowance for doubtful accounts $500
Answer:
$350,000
Explanation:
Computation for the required sales in dollars to break even.
First step is to calculate the Contribution margin
Revenues $380,000
less Variable costs $224,200
Contribution margin $155,800
Contribution margin ratio = 155,800 / 380,000= 41%
Break even sales in dollars = Total fixed costs / CM Ratio = $143,500/ 41% = $350,000
Therefore the required sales in dollars to break
even is $350,000
Explanation:
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