??HELP...I AM TAKING A TIMED TEST! Based on the information in Table? 4?1,? the
ID: 2636756 • Letter: #
Question
??HELP...I AM TAKING A TIMED TEST!
Based on the information in Table?
4?1,?
the inventory turnover ratio is:
Stewart Company
?Balance Sheet
Assets:
Cash and marketable securities
$600,000?
Accounts receivable
900,000?
Inventories??????????????????????????
1,500,000?
Prepaid expenses
75,000?
Total current assets
$3,075,000?
Fixed assets?????????????????????????????
8,000,000?
Less: accum. depr.
(2,075,000)
Net fixed assets
$5,925,000?
Total assets
$9,000,000?
Liabilities:
Accounts payable
$800,000?
Notes payable??????????????????????????????????
700,000?
Accrued taxes
50,000?
Total current liabilities
$1,550,000?
Long?term?
2,500,000?
Owner's equity (1 million shares of common stock outstanding)
4,950,000?
Total liabilities and owner's equity
$9,000,000?
Net sales (all credit)
$10,000,000?
Less: Cost of goods sold
(3,000,000)
Selling and administrative expense
(2,000,000)
Assets:
Cash and marketable securities
$600,000?
Accounts receivable
900,000?
Inventories??????????????????????????
1,500,000?
Prepaid expenses
75,000?
Total current assets
$3,075,000?
Fixed assets?????????????????????????????
8,000,000?
Less: accum. depr.
(2,075,000)
Net fixed assets
$5,925,000?
Total assets
$9,000,000?
Liabilities:
Accounts payable
$800,000?
Notes payable??????????????????????????????????
700,000?
Accrued taxes
50,000?
Total current liabilities
$1,550,000?
Long?term?
debt2,500,000?
Owner's equity (1 million shares of common stock outstanding)
4,950,000?
Total liabilities and owner's equity
$9,000,000?
Net sales (all credit)
$10,000,000?
Less: Cost of goods sold
(3,000,000)
Selling and administrative expense
(2,000,000)
Explanation / Answer
Inventory Turnover = Cost of goods sold / Inventories
COGS = 3,000,000
Inventories = 1,500,000
ITR = 3,000,000/1,500,000 = 2
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