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5 October, 00:40

Calculate the inventory turnover for 2019. (Round your answer to 2 decimal places.) Calculate the number of days' sales in inventory for 2019, using year-end inventories. (Use 365 days a year. Round your answer to 1 decimal place.) Calculate the accounts receivable turnover for 2019. (Round your answer to 1 decimal place.) Calculate the number of days' sales in accounts receivable for 2019, using year-end accounts receivable. (Use 365 days a year. Round your answer to 1 decimal place.)

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  1. 5 October, 01:00
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    A. 3.63 times

    B. 95.5 days

    C. 21.0 times

    D. 13.5 days

    Explanation:

    a.

    Inventory turnover = Cost of goods sold / Average inventories

    Hence:

    = $602,250 / $166,000

    = 3.63 times

    b.

    Number of days' sales in inventory = Inventory at year-end / Average day's cost of good sold

    = $157,575 / $1,650

    = 95.5 days

    Average day's cost of goods sold

    = Annual cost of good sold / 365

    = $602,250 / 365 = $1,650

    c. Accounts receivable turnover

    = Sales / Average accounts receivable

    = $821,250 / $39,100

    = 21.0 times

    d.

    Number of days' sales in accounts receivable

    = Accounts receivable at year-end / Average day's sales

    = $30,400 / $2,250 = 13.5 days

    Average day's sales = Annual sales / 365

    = $821,250 / 365

    = $2,250
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