Comparative financial statements for Heritage Antiquing Services for the fiscal

Question

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or preferred stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75. The market value of the company’s common stock at the end of the year was $26. All of the company’s sales are on account.

Compute the following financial data for short-term creditors for this year:

1. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover _____________

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover __________________

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 7.5

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 4.0

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 9.0

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 3.2

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 8.5

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 3.8

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 22

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 12.3

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 7.5

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 4.0

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 9.0

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 3.2

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 8.5

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 3.8

. Accounts receivable turnover. (Round your answer to 1 decimal place.)

Accounts receivable turnover 22

2. Inventory turnover. (Round your answer to 1 decimal place.)

Inventory turnover 12.3

Explanation / Answer

Option C is the correct option

1: Accounts receivable turnover= Sales/ Average AR

= 66000/((9000+6500)/2)

=8.52 times

2: Inventory turnover = Cost of goods sold/ Inventory

= 43000/((12000+10600)/2)

=3.81 times

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.