Answer:
Lendell Company
a. Current ratio = Current assets/Current liabilities
= $148,000/50,000
= 2.96
= 3
b. Accounts Receivable Turnover = Net Sales/Average Accounts Receivable
= $396,000/66,000
= 6 times
c. Average collection period = Average Accounts Receivable/Net Sales * 365 days
= $66,000/$396,000 * 365
= 60.8 days
d. Inventory turnover = Cost of Goods Sold/Average Inventory
= $196,000/56,000
= 3.5 times
e. Days in inventory = 365/3.5
104.3 days
Step-by-step explanation:
a) Data and Calculations:
Lendell Company
Balance Sheets
December 31
2020 2019 Average
Cash $ 16,000 $ 29,000 $ 22,500
Accounts receivable (net) 71,000 61,000 66,000
Inventory 61,000 51,000 56,000
Current assets $148,000 $141,000 $144,500
Plant assets (net) 200,000 176,000 188,000
$348,000 $317,000 $332,500
Accounts payable $50,000 $59,400 $54,700
Mortgage payable (15%) 106,000 106,000 106,000
Common stock, $10 par 143,000 115,000 129,000
Retained earnings 49,000 36,600 42,800
$348,000 $317,000 $332,500
Additional information for 2020:
1. Net income was $25,200.
2. Sales on account were $415,300.
Sales returns and allowances amounted to $19,300.
Net Sales $396,000
3. Cost of goods sold was $196,000.
4. Net cash provided by operating activities was $44,400.
5. Capital expenditures were $26,200
Cash dividends were $8,900