Jinx & Pooh manufactures and markets many products you use every day. In 2019, sales...
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Accounting
Jinx & Pooh manufactures and markets many products you use every day. In 2019, sales for the company were $86,500 (all amounts in millions). The annual report did not report the amount of credit sales, so we will assume that all sales were on credit. The average gross profit percentage was 49.9 percent. Account balances for the year follow:
| Beginning | Ending | |
|---|---|---|
| Accounts receivable (net) | $ 6,600 | $ 7,000 |
| Inventory | 7,380 | 7,400 |
Required:
-
Compute the turnover ratios for accounts receivable and inventory.
-
By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory.
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