Question

2 MULTIPLE CHOICE. PLEASE ANSWER ASAP. THANK YOU!

28. Based on the following data for the current year, what is the inventory turnover (rounded to one decimal place)?

Sales on account during year	$489,126
Cost of goods sold during year	195,631
Accounts receivable, beginning of year	42,096
Accounts receivable, end of year	51,765
Inventory, beginning of year	33,834
Inventory, end of year	41,634

a.4.2

b.13

c.18.1

d.5.2

29. Use this information for Kellman Company to answer the question that follow.

The balance sheets at the end of each of the first two years of operations indicate the following:

Kellman Company
	Year 2	Year 1
Total current assets	$611,300	$576,400
Total investments	69,400	41,800
Total property, plant, and equipment	912,700	761,200
Total current liabilities	111,900	80,400
Total long-term liabilities	295,300	244,200
Preferred 9% stock, $100 par	88,600	88,600
Common stock, $10 par	547,200	547,200
Paid-in capital in excess of par—Common stock	65,500	65,500
Retained earnings	484,900	353,500

Using the balance sheets for Kellman Company, if net income is $104,500 and interest expense is $36,100 for Year 2, what is the return on total assets for the year (rounded to two decimal places)?

a.6.56%

b.4.60%

c.7.58%

d.9.46%

Answer 1

28	Inventory Turnover ratio
	Inventory Turnover ratio = Cost of goods sold/Average inventory
	Average inventory =(Beginning inventory+Ending Inventory)/2
	Average inventory =($33834+$41634)/2
	=$37734
	Cost of goods sold = $195631
	Inventory Turnover = $195631/$37734
	= 5.18
	Rounded to 5.2
	D. 5.2
29	Return on total assets
	Return on total assets = Earning before interest/Average assets
	Net Income	$104,500
	Add: Interest expenses	$36,100
	Earning before interest	$140,600
	Total current assets	$576,400
	Total investment	$41,800
	Total property, plant and equipment	$761,200
	Total Assets for Year 2	$1,379,400
	Total current assets	$611,300
	Total investment	$69,400
	Total property, plant and equipment	$912,700
	Total Assets for Year 2	$1,593,400
	Average Assets[(1379400+1593400)/2]	1486400
	Return on total Assets ($140600/$1486400)	9.46%
	D. 9.46%