Double West Suppliers (DWS) reported sales for the year of S390,000, all on cred

Question

Double West Suppliers (DWS) reported sales for the year of S390,000, all on credit. The average gross profit percentage was 30 percent on sales. Account balances follow: Beginning Ending Accounts receivable (net S53,000 $63,000 68,000 48,000 Inventory Required: 1. Compute the following turnover ratios. (Round your answers to 1 decimal place.) Receivables Turnover Ratic Inventory Turnover Ratio 2. By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory. (Use 365 days in a year. Do not round intermediate calculations. Round turnover ratio calculation and final answers to 1 decimal place.) Average Days to Collect Average Days to Sell days days

Explanation / Answer

1.

2.

Accounts receivable turnover ratio = Net credit sales / Average accounts recievable Accounts receivable turnover ratio = $390,000 / (($53,000+$63,000)/2) Accounts receivable turnover ratio = 6.7 Times

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