Consider the following financial statement information for the Zacee Corporation
ID: 2716319 • Letter: C
Question
Consider the following financial statement information for the Zacee Corporation for 2013:
Items
Beginning
Ending
Inventory
$7,708
$7,866
Accounts Receivable (A/R)
$87,309
$92,819
Accounts Payable (A/P)
$19,531
$20,035
Credit Sales
$144,077
Cost of Goods Sold (COGS)
$126,215
What are the inventory turnover, accounts receivable turnover, and accounts payable turnover?
18.32; 1.55; 6.30 times
18.50; 1.60; 7.28 times
16.21; 1.60; 6.38 times
16.21; 1.40; 6.38 times
18.50; 1.60; 6.38 times
Items
Beginning
Ending
Inventory
$7,708
$7,866
Accounts Receivable (A/R)
$87,309
$92,819
Accounts Payable (A/P)
$19,531
$20,035
Credit Sales
$144,077
Cost of Goods Sold (COGS)
$126,215
Explanation / Answer
Answer:
Inventory turnover = Total sales /average inventory
= 144077/ closing inventory = 144077/(7866+7708)/2 = 18.50 times
Account receivable turn over = total credit sales / average accounts receivable
= 144077/(92819 + 87309)/2= 1.60 times
Accounts payable = credit purchase / average payable
Credit purchase = cost of goods sold - Opening inventory + closing inventory
therefore = 126215-7708+7866 = 126373 is the credit purchase
Accounts payable turnover = 126373/(19531+20035)/2
=6.38 times
Therefore the answer is 18.50; 1.60 ; 6.38
Thank You
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