Question

The following balance sheet information was provided by Smart company: Assets 2018 2017 Account Receivable 21,000...

The following balance sheet information was provided by Smart company:

Assets 2018 2017
Account Receivable 21,000 17,000
Allowance for Doubtful Accounts (3,000) (2,000)
Net Accounts Receivable 18,000 15,000

Assuming that net credit sales for the year 2018 totaled $370,000, what is the company's 2018 accounts receivable?
a. 19.5x
b. 17.6x
c. 20.6x
d. 22.4x

Refer to the facts from the previous question. Calculate the average collection period:
a. 16.29 days
b. 20.74 days
c. 18.72 days
d. 17.72 days

the chapters company reported net income of $150,000 on net sales of $350,000 . The ccompany has average total assets of $ 575,000, average total liabilities of $ 180,000 . and avergae total stockholders' equity of $395,000. what is the company's returen on equity ratio?
a. 38.0%
b. 88.6%
c. 26.1%
d. 83.3%

Sugar company has cash of $5,400, account receivable of 15,500, inventory of $ 19,600. and equipment, net of accumulated depreciation of $20,200. .The company also has long-term notes payable of $19,000 and accounts payable of 16,000. This company's working capital is:
a. $44,700
b. 5,500
c. 25,700
d. 24,500.

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Homework Answers

Answer #1

1)20.6x (370000 / 18000)

Option 'c' is correct.

2)16.29 days

Option 'a' is correct

Average account receivables = (18000+15000)/2 = 16500

Average receivable turnover ratio

= Net credit sales / Average accounts receivable

= 370000 / 16500 = 22.42

Average collection period = 365/ Average receivable turnover ratio = 365/22.42 = 16.29 days

3) 38%

Option 'a' is correct

Return on equity = Net income / Shareholders equity

= 150000/395000 = 38%

4) $24,500

Option 'c' is correct.

Working capital = 5400+15500+19600-16000=24500

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