Double West Suppliers (DWS) reported sales for the year of $360,000, all on credit. The average gross profit percentage was 40 percent on sales. Account balances follow:
|
Beginning |
Ending |
| Accounts receivable (net) |
$ |
51,000 |
|
$ |
61,000 |
|
| Inventory |
|
67,000 |
|
|
46,000 |
|
|
| Required: |
| 1. |
Compute the following turnover ratios.
|
| 2. |
By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory.
|