Chapter 9 Assignment C | ezto.mheducation.com/hm.tpx?-:0.9063451626650686 152005
ID: 2537700 • Letter: C
Question
Chapter 9 Assignment C | ezto.mheducation.com/hm.tpx?-:0.9063451626650686 1520057501 Selected data from Komar Company follow As of December 31 Accounts receivable Allowance for doubtful accounts(20,000) 014 $500,000 2013 $450,000 (16,000) Net accounts receivable $480,000434,000 $600,000 $525,000 Inventories, lower of cost or market Income Statement for the Years Ended December 31 2014 2013 Net credit sales Net cash sales $2,000,000 $1,760,000 320,000 400,000 2,400,000 2,080,000 Net sales 1,440,000 216,000 24,000 1,600,000 Cost of goods sold Selling, general, and administrative expenses Other expenses 240,000 40,000 Total operating expenses $1,880,000 1,680,000 Required a. Compute the accounts receivable turnover for 2014. (Round your answer to 2 deci Accounts receivable turnover times Type here to searchExplanation / Answer
A. Account Receivable Turnover
Account Receivable Turnover of 2014 = Net Value of credit sales in 2014 / Average Net account receivable in 2014
= 2000000 / 457000
= 4.38 Times
B. Inventory Turnover For 2014
Inventrory Turnover for 2014 = Total Sales of 2014 / Average inventory in 2014
= 2400000 / 562500
= 4.27 Times
C. Net Margin for 2013
Net Margin for 2013 = Net Profit of 2013 / Total Revenue (Sales) x 100
= 400000 / 2080000 x 100
= 19.23 Percent (%)
Working Calculations:-
1. Credit Sales for 2014 = 2000000 (Given)
2. Average Net Account Receivable for 2014 = ( Opening Account Rec. for 2014 + Closing Account Rec. for 2014) / 2
= (434000 + 480000) / 2
= 457000
3. Total Sales for 2014 = Net Credit sales + Net cash sales in 2014 = 2000000 + 400000 = $2400000
4. Average Inventory = (Opening Inventory for 2014 + Closing inventory for 2014 ) / 2 = (525000 + 600000) / 2 = 1125000 / 2 = $562500
5. Net Profit of 2013 = Total Revenue for 2013 - Total Expenses for 2013 = 2080000 - 1680000 = $400000
6. Total Revenue for 2013 = $2080000 (as given)
7. all figures in ($)
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