Question

Selected data from Emporia Company follow: Balance Sheets As of December 31 2018 2017 Accounts receivable $ 600,000 $ 480,000 Allowance for doubtful accounts (40,000 ) (20,000 ) Net accounts receivable $ 560,000 $ 460,000 Inventories, lower of cost or market $ 500,000 $ 400,000 Income Statement For the Years Ended December 31 2018 2017 Net credit sales $ 2,400,000 $ 1,950,000 Net cash sales 600,000 450,000 Net sales 3,000,000 2,400,000 Cost of goods sold 1,800,000 1,520,000 Selling, general, and administrative expenses 300,000 240,000 Other expenses 80,000 50,000 Total operating expenses $ 2,180,000 $ 1,810,000 Required Compute the accounts receivable turnover for 2018. Compute the inventory turnover for 2018. Compute the net margin for 2017.

Answer 1

Answer:

Compute the accounts receivable turnover for 2018.

4.29 times

Compute the inventory turnover for 2018

3.6 times

Compute the net margin for 2017.

24.58%

Explanation:

Compute the accounts receivable turnover for 2018.

accounts receivable turnover = Sales / Accounts receivable

                                                  =  $ 2,400,000 / $ 560,000

                                                  = 4.29 times

Compute the inventory turnover for 2018

Inventory turnover = cost of Sales / inventory

                                = $1,800,000 /  $ 500,000

                                = 3.6 times

Compute the net margin for 2017.

net margin = Net Profit / Sales × 100

                  = (2,400,000-1,810,000) / 2,400,000  × 100

                  = 24.58%

Answer 2

The inventory turnover and net margin of the given company is 3.6 times and 24.58% respectively.

The accounts receivable turnover for 2018 is 4.29 times

The inventory turnover for 2018   is 3.6 times

The net margin for 2017 is 24.58%  

 

The Account receivable turnover for 2018 can be calculated by,

$\bold {Turnover = { \dfrac {Sales}{ Accounts\ receivable}}}$

Put the values in the formula,

$\bold {Turnover = { \dfrac {\ \ 2,400,000}{ \ \ 560,000 }}}\\\\\bold {Turnover = 4.29\ times}$

                                                 

The inventory turnover for 2018 can be calculated by,,  

$\bold {Inventory\ Turnover = { \dfrac {Sales\ cost}{ Inventory}}}$  

$\bold {Inventory\ Turnover = { \dfrac {\ \ 1,800,000}{ \ \ 5000,000}}}\\\\\bold {Inventory\ Turnover = 3.6\ times}$                              

The net margin for 2017 can be calculated by,

$\bold{ Net\ margin = \dfrac {Net\ Profit} {Sales} \times 100}}$

Net profit =  2,400,000-1,810,000 =   590000

$\bold{ Net\ margin = \dfrac {590000} {2400000} \times 100}}\\\\\bold{ Net\ margin = 24.58\%}$

Therefore, the inventory turnover and net margin of the given company is 3.6 times and 24.58% respectively.

To know more about Inventory turnover,

https://brainly.com/question/14921067