a) Canadian Bacon Inc. financial statements are presented in the table below. Ba
ID: 2655717 • Letter: A
Question
a) Canadian Bacon Inc. financial statements are presented in the table below.
Based on the information in the table, and using cost of goods sold and a 365-day year, calculate Days of Sales in Inventory (using cost of goods sold).
Round the answers to two decimal places
Balance Sheet December 31, 2011
Income Statement Year of 2011
Cash and marketable securities $143,000 Accounts payable $278,000 Accounts receivable $354,000 Notes payable $87,000 Inventories $672,000 Accrued expenses $65,000 Prepaid expenses $12,500 Total current liabilities $430,000 Total current assets $1,181,500 Long-term debt $284,000 Gross fixed assets $1,675,000 Par value and paid-in-capital $228,000 Less: accumulated depreciation $500,000 Retained Earnings $1,414,500 Net fixed assets $1,175,000 Common Equity 1,642,500 Total assets $2,356,500 Total liabilities and owner’s equity $2,356,500Explanation / Answer
Inventory turnover ratio = Cost of goods sold / Inventory
Inventory turnover ratio = $2,195,620 / $672,000
Inventory turnover ratio = 3.267292 times
Days of sales Inventory = 365 days / Inventory turnover ratio
Days of sales Inventory = 365 days / 3.267292
Days of sales Inventory = 111.72 Days
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