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Selected Balances from a Company's Financial Statements Are Shown Below

Question 218

Essay

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2018:
(a) accounts receivable turnover
(b) inventory turnover
(c) days' sales uncollected
(d) days' sales in inventory
(d) profit margin.
(e) return on total assets.
 Dec. 31.  Dec. 31.  For the  Accounts receivable 20182017 Year 2018  Merchandise inventory $27,000$24,000 Total assets 25,00020,000 Accounts payable 296,000244,000 Salaries payable 26,00032,000 Sales (all on credit) 3,0004,400 Cost af goods sold $312,000 Salaries expense 165,600 Other expenses 48,000 Net income 75,000\begin{array} { l | l | l | l } & \text { Dec. 31. } & \text { Dec. 31. } & \text { For the } \\\hline \text { Accounts receivable } & 2018 & \underline { 2017 } & \text { Year 2018 } \\\hline \text { Merchandise inventory } & \$ 27,000 & \$ 24,000 & \\\hline \text { Total assets } & 25,000 & 20,000 & \\\hline \text { Accounts payable } & 296,000 & 244,000 & \\\hline \text { Salaries payable } & 26,000 & 32,000 & \\\hline \text { Sales (all on credit) } & 3,000 & 4,400 & \\\hline \text { Cost af goods sold } & & & \$ 312,000 \\\hline \text { Salaries expense } & & & 165,600 \\\hline \text { Other expenses } & & & 48,000 \\\hline \text { Net income } & & & 75,000 \\\hline\end{array}

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(a) Accounts receivable turnover = $312,...

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