Welcome to Westonci.ca, the ultimate question and answer platform. Get expert answers to your questions quickly and accurately. Explore thousands of questions and answers from a knowledgeable community of experts ready to help you find solutions. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.
Sagot :
Answer:
a-1
Year 2 34%
Year 1 33%
a-2
Year 2 4.5
Year 1 4.0
a-3
Year 2 5.0
Year 1 6.1
b. Year 2
Explanation:
a-1. Computation for the gross profit percentage for both years using this formula
Gross profit percentage = Gross profit / Sales
Let plug in the formula
Year 2 =( $ 750,000-495,000)/$ 750,000 = 34%
Year 1 = ($ 610,000-$408,000)/$ 610,000 = 33%
a-2. Computation for the inventory turnover for both years using this formula
Inventory turnover = Cost of goods sold / Average inventory during the year
Let plug in the formula
Year 2 = 495,000 /110,000 = 4.5
Year 1 = 408,000/102,000= 4.0
a-3. Computation for the accounts receivable turnover for both years using this formula
Accounts receivable turnover = Sales (on account) / Average receivables during the year
Let plug in the formula
Year 2 = $ 750,000 /150,000 = 5.0
Year 1 = $ 610,000 /100,000 = 6.1
b. Based on the above calculation Year 2 show a positive trend.
Thank you for your visit. We are dedicated to helping you find the information you need, whenever you need it. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.