JUST PART (E) Lendell Company has these comparative balance sheet data: LENDELL
ID: 2523608 • Letter: J
Question
JUST PART (E)
Lendell Company has these comparative balance sheet data: LENDELL COMPANY Balance Sheets December 31 2019 2018 Cash Accounts receivable (net) Inventory Plant assets (net) $ 15,000$ 30,000 60,000 50,000 180,000 $345,000 $320,000 $ 50,000 S 60,000 100,000 100,000 120,000 40,000 $345,000 $320,000 70,000 60,000 200,000 Accounts pavable Mortgage payable (15%) Common stock, $10 par Retained earnings 140,000 55,000 Additional information for 2019: 1. Net income was $25,000. 2. Sales on account were $375,000. Sales returns and allowances amounted to $25,000. 3. Cost of goods sold was $198,000. 4. Net cash provided by operating activities was $48,000. 5. Capital expenditures were $25,000, and cash dividends were $10,000.Explanation / Answer
Inventory turnover ratio = 101 Days
(d)Inventory turnover ratio = Cost of goods sold / Average Inventory
= $1,98,000/ [($60000+$50000)/2]
= $198000 / $55000
= 3.60 Times
(e)Days In Inventory = Number of days in a year / Inventory turnover ratio
= 365 / 3.60
= 101.39 Days or 101 Days (Rounded)
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