Chapter 3, Problem 18E

For its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods Sold of $525,000. At the beginning of the year its Accounts Receivable were $80,000 and its Inventory was $100,000. At the end of the year its Accounts Receivable were $86,000 and its Inventory was $110,000. Calculate (i) the inventory turnover ratio for the year (ii) accounts receivable turnover ratio for the year (iii) the average days of sales were in Accounts Receivable during the year (iv) average days of sales  in Inventory during the year.

At the end of the fiscal year, Big Box Depot had account receivables of $1.89 billion on net sales of $8.5 billion. At the same point in time, Lumber Jack Inc. had accounts receivable of $6.3 billion on net sales of $9.2 billion. Each company had cash on hand of $600,000.   Calculate the accounts receivable turnover and days' sales outstanding (DSO) for each company. Based solely on these metrics, which company reported stronger financial metrics. Explain.

Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for a recent year are presented here (in millions).   Target Corporation Wal-Mart Stores, Inc. Income Statement Data for Year Net sales $61,471 $374,526 Cost of goods sold 41,895 286,515 Selling and administrative expenses 16,200 70,847 Interest expense 647 1,798 Other income (expense) 1,896 4,273 Income tax expense 1,776 6,908 Net income $2,849 $12,731 Balance Sheet Data (End of Year) Current assets $18,906 $47,585 Noncurrent assets 25,654 115,929 Total assets $44,560 $163,514 Current liabilities $11,782 $58,454 Long-term debt 17,471 40,452 Total stockholders' equity 15,307 64,608 Total liabilities and stockholders' equity $44,560 $163,514 Target Corporation Wal-Mart Stores, Inc. Beginning-of-Year Balances Total assets $37,349 $151,587 Total stockholders' equity 15,633 61,573 Current liabilities 11,117 52,148 Total liabilities 21,716 90,014 Other Data Average net accounts receivable $7,124 $3,247 Average inventory…

BC Corp. reported a P500,000 account receivable balance at the beginning of the calendar year. For the year, it reported net credit sales of P4,000,000 and collections from customers of P4,050,000. An analysis of the sales showed that a sale amounting to P40,000 was shipped to the buyer on Dec. 31 under FOB destination term while a sale amounting to P50,000 was shipped to the buyer on Jan. 1 under FOB shipping point term. Included in the collections was an over-payment by a customer in the amount of P13,000. Not included in the initial sales and collections amounts are the following:(A) Sales made to officers made under customary terms, P200,000 of which were collected – P700,000 and(B) Claims against common carrier – P 200,000. How much should ABC report as accounts receivables as of Dec. 31?

Universal Sports Supply began the year with an accounts receivable balance of $200,000 and a year-end balance of $220,000. Credit sales of $750,000 generate a gross profit of $250,000. Calculate the receivables turnover ratio for the year.

Lucky Furniture Store has the following balances in its financial statements for the past financial year: Sales - R1,854,200 Cost of sales – R1,534,200 Gross profit – R320,000 Inventory – R122,736 Receivables – R180,270 Cash – R245,472 Non-current assets – R1,448,594 Total assets – R2,671,594 Assuming a 360-day year, the average collection period is _____ days

The gross of MARIGOLD Trading for the first quarter of the year amounted to P8, 284,000 and the sales returns and allowance totaled P313, 900. Find the net sales?