Financial Reporting and Analysis Chapter 5 …

Financial Reporting and AnalysisChapter 5 SolutionsEssentials of Financial Statement turnover(AICPA adapted)Inventory turnover = Cost of goods soldAverage inventory = $2,200,000$550,000 = $550,000 = $500, 000 + $600, and inventory turnover(AICPA adapted)Accounts receivable turnover= Net credit salesAverage trade receivables = $2,500,000$462,500 = $462,500 = $475, 000 + $450, 0002 Inventory turnover = Cost of goods goldAverage inventory = $2,000,000$575,000=348.$575,000 = $600,000 + $550, turnover(AICPA adapted)Inventory turnover = Cost of goods soldAverage inventory = $1,800,000$450,000=40.$1,800,000= $400,000 + $1,900,000 - $500,000$450,000 = $400, 000 + $500, turnover(AICPA adapted)Total net sales equals total credit sales plus total cash sales. The accountsreceivable turnover ratio is used to find total credit sales:Accounts receivable turnover = Total credit salesAverage =Total credit sales$275,000$275,000 = $250, 000 + $300, 0002 Total credit sales = $275,000 = $1,375,000 Total net sales = $1,375,000 + $100,000 = $1,475, and quick ratios(AICPA adapted)The write-off of obsolete inventory would decrease Todd Corporation scurrent assets, thus decreasing the current ratio.

Financial Reporting and Analysis Chapter 5 Solutions Essentials of Financial Statement Analysis Exercises Exercises E5-1. Inventory turnover (AICPA adapted) Inventory turnover =

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