10a. Alpha\'s net accounts receivable were $500,000 at December 31, 2015, and $6
ID: 2331072 • Letter: 1
Question
10a. Alpha's net accounts receivable were $500,000 at December 31, 2015, and $600,000 at December 31, 2016. Net cash sales for 2016 were $250,000. The accounts receivable turnover for 2016 was 5.3. Use this information to determine the Fiscal Year 2016: (Round & enter your answers to one decimal place for non-dollar ratios and enter the value. For dollar ratio enter as whole dollars only.)
1. Total Net Sales
2. Total Net Credit Sales
10b. The following financial information is for Alpha Corporation are for the fiscal years ending 2017 & 2016 (all balances are normal):
Item/Account
2017
2016
Cash
$26,000
$16,000
Accounts Receivable
40,000
50,000
Inventory
30,000
22,000
Current Liabilities
76,000
42,000
Net Sales (all credit)
390,000
360,000
Cost of Goods Sold
260,000
250,000
Use this information to determine for FY 2017: (Round & enter your answers to one decimal place and enter the value.)
1. the inventory turnover ratio: ________
2. number of days of inventory: ________
3. Gross Profit Margin:____________
10 c.
The following financial information is for Alpha Corporation are for the fiscal years ending 2017 & 2016 (all balances are normal):
Item/Account
2017
2016
Cash
$26,000
$16,000
Accounts Receivable
30,000
50,000
Inventory
30,000
22,000
Current Liabilities
76,000
42,000
Net Sales (all credit)
390,000
360,000
Cost of Goods Sold
260,000
250,000
Use this information to determine the quick ratio for FY 2017: (Round & enter your answers to one decimal place and enter the value.)
10d.
The following financial information is for Alpha Corporation are for the fiscal years ending 2017 & 2016 (all balances are normal):
Item/Account
2017
2016
Cash
$26,000
$16,000
Accounts Receivable
40,000
50,000
Inventory
30,000
22,000
Current Liabilities
76,000
42,000
Net Sales (all credit)
390,000
360,000
Cost of Goods Sold
260,000
250,000
Use this information to determine for FY 2017: (Round & enter your answers to one decimal place for non-dollar ratios and enter the value. For dollar ratio enter as whole dollars only.)
1. the Current Ratio
2. Working Capital
Item/Account
2017
2016
Cash
$26,000
$16,000
Accounts Receivable
40,000
50,000
Inventory
30,000
22,000
Current Liabilities
76,000
42,000
Net Sales (all credit)
390,000
360,000
Cost of Goods Sold
260,000
250,000
Explanation / Answer
Solution 10a:
Accounts receivable turnover = 5.3
Credit sales / Average accounts receivables = 5.3
Average accounts receivables = ($500,000 + $600,000) / 2 = $550,000
Credit Sales = $550,000 * 5.3 = $2,915,000
Total net sales = Credit sales + Cash sales = $2,915,000 + $250,000 = $3,165,000
Total net credit sales = $2,915,000
Solution 10b:
Total inventory turnover ratio = Cost of goods sold / Average inventory
Average inventory = ($30,000 + $22,000) / 2 = $26,000
Inventory turnover ratio = $260,000 / $26,000 = 10 times
Number of days of inventory = Nos of day in a year / Inventory turnover ratio = 365/10 = 36.5 days
Gross profit margin = Sales - COGS = $390,000 - $260,000 = $130,000
Solution 10c:
Quick ratio = Quick assets / Current liabilities
Quick Assets = Cash + Accounts receivables = $26,000 +$30,000 = $56,000
Quick ratio for FY 2017 = $56,000 / $76,000 = 0.7
Solution 10d:
Current ratio = Current assets / Current liabilities
Current assets = Cash + Accounts receivables + Inventory = $26,000 + $40,000 + $30,000 = $96,000
Current liabilities = $76,000
Current ratio = $96,000 / $76,000 = 1.3
Working capital = Current Assets - Current liabilities = $96,000 - $76,000 = $20,000
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