Question: Calculate and interpret liquidity ratios Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it. Evaluate their inventory management and suggest ways to improve it. Selected information ($) 2020 2019 2018 Net Sales (80% on credit) 430,000 720,000 640,000 Cost of Goods Sold 250000 350000 320000 Accounts Receivable 220,000 110,000 76,000 Allowance for doubtful accounts 35000 18000 14000 Bad debt expense 30000 12000 9000 Inventory 150000 100000 80000
Question: Calculate and interpret liquidity ratios Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it. Evaluate their inventory management and suggest ways to improve it. Selected information ($) 2020 2019 2018 Net Sales (80% on credit) 430,000 720,000 640,000 Cost of Goods Sold 250000 350000 320000 Accounts Receivable 220,000 110,000 76,000 Allowance for doubtful accounts 35000 18000 14000 Bad debt expense 30000 12000 9000 Inventory 150000 100000 80000
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 8EB: Using the following select financial statement information from Mover Supply Depot, compute the...
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Question: Calculate and interpret
- Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company.
- Assuming that they have a 60-day credit policy, evaluate their
accounts receivable management and recommend ways to improve it. - Evaluate their inventory management and suggest ways to improve it.
Selected information ($) |
2020 |
2019 |
2018 |
Net Sales (80% on credit) |
430,000 |
720,000 |
640,000 |
Cost of Goods Sold |
250000 |
350000 |
320000 |
Accounts Receivable |
220,000 |
110,000 |
76,000 |
Allowance for doubtful accounts |
35000 |
18000 |
14000 |
|
30000 |
12000 |
9000 |
Inventory |
150000 |
100000 |
80000 |
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