The following information for Vision Company is given: 2016 Sales 9,000 Cost of goods sold 1,500...

The following information for Vision Company is given:

	2016
Sales	9,000
Cost of goods sold	1,500
Accounts receivable	1,000
Inventory	250

Calculate the Accounts Receivable Turnover, Inventory Turnover and Day’s Sales in Inventory for 2016.

Calculate Day’s Sales in Inventory for 2016. What this ratio attempt to measure?

Calculate the Day’s Sales in Receivables for 2016.

(1 mark)

How long did it take on average for credit customers to pay off their accounts during the past year?

Solutions

Expert Solution

(1) Day Sales in Inventory is the average number of days that is taken by company to sell its goods. If it is higher in days, then it means company is unable to manage its inventory properly.

Its formula is 365*average inventory/cost of goods sold

Given inventory = 250

Cost of goods sold = 1,500

Day sales in Inventory = 365*250/1500 = 61 days.

Inventory turnover ratio = cost of goods sold/ inventory

= 1500/250

= 6 times

Day sales in Receivables is the average number of days debtors take to pay off the Money for the goods they purchased.

The company should be able to manage its debtors properly.

It is calculated as 365*accounts receivables/credit sales

Given accounts receivables = 1,000

Sales = 9,000

Debtors days = 365*1000/9000 = 41 days

On an average it is taking 41 days for the credit customers to pay off their accounts.

Assumptions:

I madean assumption that number of days in an year is 365 days.

The given sales are all on credit basis.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

The following information relates to Kelly Company for 2021. Sales --> 1,845,000 Cost of Goods Sold...

The following information relates to Kelly Company for 2021. Sales --> 1,845,000 Cost of Goods Sold --> 1,160,000 Operations expenses & Income taxes --> 365,000 Depreciation of plant assets --> 215,000 Amortization of intangible assets --> 50,000 Increase of Accounts Receivable --> 38,000 Decrease in inventory --> 62,000 Decrease in Accounts Payable --> 30,000 Increase in accrued liabilities --> 8,000 Calculate the 2021 net cash flow from operating activities using the indirect method.You must show your work for full credit.

You are given the following information: 2018 Sales $23,000 Cost of goods sold $16,000 Depreciation expense...

You are given the following information: 2018 Sales $23,000 Cost of goods sold $16,000 Depreciation expense $4,000 Interest $1,800 Dividends $1,300 Tax rate 35% New debt issuance $2,000 2017 2018 Current assets $4,800 $5,900 Current liabilities $2,700 $3,200 Net fixed assets $14,000 $17,000 a. Calculate the operating cash flow for 2018. (Hint: Taxes = Earnings before taxes x Tax rate) (show your work) b. Calculate the cash flow from assets for 2018. (show your work ) c. Calculate the cash...

1- You have been given the following information: Net sales = $20,000,000 Cost of goods sold...

1- You have been given the following information: Net sales = $20,000,000 Cost of goods sold = $9,000,000 Addition to retained earnings = $3,600,000 Dividends paid to preferred and common stockholders = $600,000 2- the firm’s 2009 income statement lists the following: EBT = $6,000, Interest expense = $0, and Taxes = $3,000. The firm’s has no preferred stock outstanding and 30,000 shares of common stock outstanding. the 2009 earnings per share is Please Solve As soon as Solve quickly...

The following partial information is available for company Z: Sales $5000 Cost of goods sold $500...

The following partial information is available for company Z: Sales $5000 Cost of goods sold $500 Salary expense $300 Unearned revenue (customer advance ) $200 Interest income $100 Gross profit would be:

Cullumber Company Oriole Company 2017 2016 2017 2016 Net sales $1,856,000 $596,000 Cost of goods sold...

Cullumber Company Oriole Company 2017 2016 2017 2016 Net sales $1,856,000 $596,000 Cost of goods sold 1,079,000 298,000 Operating expenses 263,000 83,000 Interest expense 7,000 2,800 Income tax expense 75,000 34,000 Current assets 590,015 $565,462 150,838 $ 143,835 Plant assets (net) 953,508 905,000 252,908 227,720 Current liabilities 120,048 137,225 63,980 54,809 Long-term liabilities 206,322 162,900 53,612 45,250 Common stock, $10 par 905,000 905,000 217,200 217,200 Retained earnings 312,153 265,337 68,954 54,296 Compute the 2017 return on assets and the return...

The following is information for Palmer Co. 2017 2016 2015 Cost of goods sold $ 563,825...

The following is information for Palmer Co. 2017 2016 2015 Cost of goods sold $ 563,825 $ 346,650 $ 311,300 Ending inventory 104,400 94,750 99,500 Use the above information to compute inventory turnover for 2017 and 2016, and its days' sales in inventory at December 31, 2017 and 2016.

Cost of Goods Sold, Cost of Goods Manufactured Gauntlet Company has the following information for January:...

Cost of Goods Sold, Cost of Goods Manufactured Gauntlet Company has the following information for January: Cost of direct materials used in production $ 37,000 Direct labor 46,000 Factory overhead 20,000 Work in process inventory, January 1 22,000 Work in process inventory, January 31 30,000 Finished goods inventory, January 1 24,000 Finished goods inventory, January 31 18,000 a. For January, determine the cost of goods manufactured. $ b. For January, determine the cost of goods sold. $

Cost of Goods Sold, Cost of Goods Manufactured Glenville Company has the following information for April:...

Cost of Goods Sold, Cost of Goods Manufactured Glenville Company has the following information for April: Cost of direct materials used in production $54,000 Direct labor 66,000 Factory overhead 20,000 Work in process inventory, April 1 45,000 Work in process inventory, April 30 50,000 Finished goods inventory, April 1 25,000 Finished goods inventory, April 30 17,000 a. For April, determine the cost of goods manufactured. Using the data given, prepare a statement of Cost of Goods Manufactured. Glenville Company Statement...

Philadelphia Company has the following information for March: Sales $455,000 Variable cost of goods sold 240,000...

Philadelphia Company has the following information for March: Sales $455,000 Variable cost of goods sold 240,000 Fixed manufacturing costs 70,000 Variable selling and administrative expenses 52,000 Fixed selling and administrating expenses 35,000 For credit, show all your work Determine the: (a) manufacturing margin (b) contribution margin (c) income from operations for Philadelphia Company.

Ferguson Company has the following information for March: Sales $600,000 Variable cost of goods sold 276,000...

Ferguson Company has the following information for March: Sales $600,000 Variable cost of goods sold 276,000 Fixed manufacturing costs 90,000 Variable selling and administrative expenses 54,000 Fixed selling and administrative expenses 36,000 Determine the following for Ferguson Company for the month of March: a. Manufacturing margin $ b. Contribution margin $ c. Income from operations $

Subjects