Question

10 Accounts receivable turnover, inventory turnover, and netmargin LO 9-2, 9-4

Selected data from Komar Company follow.

 

Balance Sheet

As of December 31

 

2014

2013

  Accountsreceivable

$

401,000

 

$

374,000

 

  Allowance fordoubtful accounts

 

(20,050

)

 

(14,960

)

 

 

 

 

 

 

 

  Net accountsreceivable

$

380,950

 

$

359,040

 

 

 

 

 

 

 

 

  Inventories, lowerof cost or market

$

484,000

 

$

447,000

 

 

 

 

 

 

 

 

 

             

 

Income Statement

for the Years Ended December 31

 

2014

2013

  Net creditsales

$

2,008,000

 

$

1,753,000

 

  Net cash sales

 

405,000

 

 

314,000

 

 

 

 

 

 

 

 

  Net sales

 

2,413,000

 

 

2,067,000

 

 

 

 

 

 

 

 

  Cost of goodssold

 

1,592,000

 

 

1,438,000

 

  Selling, general,and administrative expenses

 

240,000

 

 

215,500

 

  Other expenses

 

39,500

 

 

22,600

 

 

 

 

 

 

 

 

  Total operatingexpenses

$

1,871,500

 

$

1,676,100

 

 

 

 

 

 

 

 

a.

Compute the accounts receivableturnover for 2014. (Round your answer to 2 decimalplaces.)

             

ACCOUNTS RECEIVABLE TURNOVER ( ) TIMES

 

Compute the inventory turnover for 2014. (Round youranswer to 2 decimal places.)

B. INVENTORY TURNOVER TIMES ( )

C. Compute the net margin for 2013. (Round your answerto 2 decimal places. (i.e., .2345 should be entered as 23.45).) NETMARGIN ( ) %

8 Working capital and current ratio LO 9-2

On June 30, 2014, Freeman Company’s total current assets were$501,000 and its total current liabilities were $270,000. On July1, 2014, Freeman issued a short-term note to a bank for $40,200cash.

 

Required

 

a.

Compute Freeman’s working capital before and after issuing thenote.

WORKING CAPITAL

BEFORE THE TRANSACTION ( )

AFTER THE TRANSACTION ( )

B. Compute Freeman’s current ratio before and after issuing thenote. (Round your answers to 2 decimalplaces.)

CURRENT RATIO

BEFORE THE TRANSACTION ( )

AFTER THE TRANSACTION ( )

9 Ratio analysis LO 9-2, 9-3

The balance sheet for BukinCorporation follows.

 

Required

 

Compute the following. (Round “Ratio and Percentage”answers to 1 decimal place.)

WORKING CAPITAL ___________

CURRENT RATIO ___________

DEBT TO ASSET RATIO ___________ %

DEBT TO EQUITY RATIO ___________

10 Accounts receivable turnover, inventory turnover, and netmargin LO 9-2, 9-4

Selected data from Komar Company follow.

Balance Sheet

As of December 31

 

2014

2013

  Accountsreceivable

$

401,000

 

$

374,000

 

  Allowance fordoubtful accounts

 

(20,050

)

 

(14,960

)

 

 

 

 

 

 

 

  Net accountsreceivable

$

380,950

 

$

359,040

 

 

 

 

 

 

 

 

  Inventories, lowerof cost or market

$

484,000

 

$

447,000

 

 

 

 

 

 

 

 

 

             

 

Income Statement

for the Years Ended December 31

 

2014

2013

  Net creditsales

$

2,008,000

 

$

1,753,000

 

  Net cash sales

 

405,000

 

 

314,000

 

 

 

 

 

 

 

 

  Net sales

 

2,413,000

 

 

2,067,000

 

 

 

 

 

 

 

 

  Cost of goodssold

 

1,592,000

 

 

1,438,000

 

  Selling, general,and administrative expenses

 

240,000

 

 

215,500

 

  Other expenses

 

39,500

 

 

22,600

 

 

 

 

 

 

 

 

  Total operatingexpenses

$

1,871,500

 

$

1,676,100

 

 

 

 

 

 

 

 

 

             

 

Required

 

a.

Compute the accounts receivableturnover for 2014. (Round your answer to 2 decimalplaces.)

ACCOUNTS RECEIVABLE TURNOVER ( ) TIMES

 

B. Compute the inventory turnover for 2014. (Round youranswer to 2 decimal places.)

INVENTORY TURNOVER ( ) TIMES

C. Compute the net margin for 2013. (Round your answerto 2 decimal places. (i.e., .2345 should be entered as23.45).)

NET MARGIN ( ) %

 

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