inancial Ratios Financial statements for McDonald Carpeting Company for the year ended December 31, 20-- are shown. McDonald Carpeting Co. Income Statement For Year Ended December 31, 20-- Revenue from sales: Sales $122,800 Less sales returns and allowances 1,100 Net sales $121,700 Cost of goods sold: Merchandise inventory, January 1, 20-- $18,000 Estimated returns inventory, January 1, 20-- 1,300 $19,300 Purchases $62,800 Less: Purchases returns and allowances $2,800 Purchases discounts 1,944 4,744 Net purchases $58,056 Add freight-in 944 Cost of goods purchased 59,000 Goods available for sale $78,300 Less: Merchandise inventory, December 31, 20-- $16,000 Estimated returns inventory, December 31, 20-- 700 16,700 Cost of goods sold 61,600 Gross profit $60,100 Operating expenses: Wages expense $18,000 Advertising expense 980 Supplies expense 320 Phone expense 1,200 Utilities expense 8,000 Insurance expense 800 Depreciation expense—building 3,500 Depreciation expense—equipment 2,500 Miscellaneous expense 200 Total operating expenses 35,500 Income from operations $24,600 Other revenues: Interest revenue $2,800 Other expenses: Interest expense 2,100 700 Net income $25,300 McDonald Carpeting Co. Statement of Owner's Equity For Year Ended December 31, 20-- C. S. McDonald, capital, January 1, 20-- $52,000 Net income for the year $25,300 Less withdrawals for the year 10,400 Increase in capital 14,900 C. S. McDonald, capital, December 31, 20-- $66,900 McDonald Carpeting Co. Balance Sheet December 31, 20-- Assets Current assets: Cash $10,400 Accounts receivable 8,900 Merchandise inventory $16,000 Estimated returns inventory 700 16,700 Supplies 1,200 Prepaid insurance 700 Total current assets $37,900 Property, plant, and equipment: Building $60,000 Less accumulated depreciation—building 18,000 $42,000 Equipment $22,000 Less accumulated depreciation—equipment 6,200 15,800 Total property, plant, and equipment 57,800 Total assets $95,700 Liabilities Current liabilities: Accounts payable $7,500 Customer refunds payable 900 Wages payable 300 Sales tax payable 1,000 Mortgage payable 600 Total current liabilities $10,300 Long-term liabilities: Mortgage payable $19,100 Less current portion 600 18,500 Total liabilities $28,800 Owner's Equity C. S. McDonald, capital 66,900 Total liabilities and owner's equity $95,700 All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was $6,800. Required: Compute the financial ratios. Inventory turnover (Round to two decimals) Average number of days required to sell inventory (Round to two decimals)

inancial Ratios Financial statements for McDonald Carpeting Company for the year ended December 31, 20-- are shown. McDonald Carpeting Co. Income Statement For Year Ended December 31, 20-- Revenue from sales: Sales $122,800 Less sales returns and allowances 1,100 Net sales $121,700 Cost of goods sold: Merchandise inventory, January 1, 20-- $18,000 Estimated returns inventory, January 1, 20-- 1,300 $19,300 Purchases $62,800 Less: Purchases returns and allowances $2,800 Purchases discounts 1,944 4,744 Net purchases $58,056 Add freight-in 944 Cost of goods purchased 59,000 Goods available for sale $78,300 Less: Merchandise inventory, December 31, 20-- $16,000 Estimated returns inventory, December 31, 20-- 700 16,700 Cost of goods sold 61,600 Gross profit $60,100 Operating expenses: Wages expense $18,000 Advertising expense 980 Supplies expense 320 Phone expense 1,200 Utilities expense 8,000 Insurance expense 800 Depreciation expense—building 3,500 Depreciation expense—equipment 2,500 Miscellaneous expense 200 Total operating expenses 35,500 Income from operations $24,600 Other revenues: Interest revenue $2,800 Other expenses: Interest expense 2,100 700 Net income $25,300 McDonald Carpeting Co. Statement of Owner's Equity For Year Ended December 31, 20-- C. S. McDonald, capital, January 1, 20-- $52,000 Net income for the year $25,300 Less withdrawals for the year 10,400 Increase in capital 14,900 C. S. McDonald, capital, December 31, 20-- $66,900 McDonald Carpeting Co. Balance Sheet December 31, 20-- Assets Current assets: Cash $10,400 Accounts receivable 8,900 Merchandise inventory $16,000 Estimated returns inventory 700 16,700 Supplies 1,200 Prepaid insurance 700 Total current assets $37,900 Property, plant, and equipment: Building $60,000 Less accumulated depreciation—building 18,000 $42,000 Equipment $22,000 Less accumulated depreciation—equipment 6,200 15,800 Total property, plant, and equipment 57,800 Total assets $95,700 Liabilities Current liabilities: Accounts payable $7,500 Customer refunds payable 900 Wages payable 300 Sales tax payable 1,000 Mortgage payable 600 Total current liabilities $10,300 Long-term liabilities: Mortgage payable $19,100 Less current portion 600 18,500 Total liabilities $28,800 Owner's Equity C. S. McDonald, capital 66,900 Total liabilities and owner's equity $95,700 All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was $6,800. Required: Compute the financial ratios. Inventory turnover (Round to two decimals) Average number of days required to sell inventory (Round to two decimals)

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inancial Ratios

Financial statements for McDonald Carpeting Company for the year ended December 31, 20-- are shown.

McDonald Carpeting Co. Income Statement For Year Ended December 31, 20--
Revenue from sales:
Sales			$122,800
Less sales returns and allowances			1,100
Net sales				$121,700
Cost of goods sold:
Merchandise inventory, January 1, 20--		$18,000
Estimated returns inventory, January 1, 20--		1,300	$19,300
Purchases		$62,800
Less: Purchases returns and allowances	$2,800
Purchases discounts	1,944	4,744
Net purchases		$58,056
Add freight-in		944
Cost of goods purchased			59,000
Goods available for sale			$78,300
Less: Merchandise inventory, December 31, 20--		$16,000
Estimated returns inventory, December 31, 20--		700	16,700
Cost of goods sold				61,600
Gross profit				$60,100
Operating expenses:
Wages expense			$18,000
Advertising expense			980
Supplies expense			320
Phone expense			1,200
Utilities expense			8,000
Insurance expense			800
Depreciation expense—building			3,500
Depreciation expense—equipment			2,500
Miscellaneous expense			200
Total operating expenses				35,500
Income from operations				$24,600
Other revenues:
Interest revenue			$2,800
Other expenses:
Interest expense			2,100	700
Net income				$25,300

McDonald Carpeting Co. Statement of Owner's Equity For Year Ended December 31, 20--
C. S. McDonald, capital, January 1, 20--		$52,000
Net income for the year	$25,300
Less withdrawals for the year	10,400
Increase in capital		14,900
C. S. McDonald, capital, December 31, 20--		$66,900

McDonald Carpeting Co. Balance Sheet December 31, 20--
Assets
Current assets:
Cash		$10,400
Accounts receivable		8,900
Merchandise inventory	$16,000
Estimated returns inventory	700	16,700
Supplies		1,200
Prepaid insurance		700
Total current assets			$37,900
Property, plant, and equipment:
Building	$60,000
Less accumulated depreciation—building	18,000	$42,000
Equipment	$22,000
Less accumulated depreciation—equipment	6,200	15,800
Total property, plant, and equipment			57,800
Total assets			$95,700
Liabilities
Current liabilities:
Accounts payable	$7,500
Customer refunds payable	900
Wages payable	300
Sales tax payable	1,000
Mortgage payable	600
Total current liabilities		$10,300
Long-term liabilities:
Mortgage payable	$19,100
Less current portion	600	18,500
Total liabilities			$28,800
Owner's Equity
C. S. McDonald, capital			66,900
Total liabilities and owner's equity			$95,700

All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was $6,800.

Required:

Compute the financial ratios.

Inventory turnover (Round to two decimals)

Average number of days required to sell inventory (Round to two decimals)

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