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Over the past year, how often did monroe manufacturing sell and replace its inventory?

Sagot :

The inventory turnover for Monroe Manufacturing is 21.86

How do we determine the frequency of inventory turnover?

Inventory turnover, the number of times Monroe Manufacturing sells and replenishes its inventory can be determined using the formula below:

inventory turnover=annual sales/ inventory

annual sales= $400,000

total current assets=cash+ accounts receivable+inventory

total current assets=$61,000

cash=$27,450

accounts receivable=$15,250

inventory=unknown(assume it is x)

$61,000=$27,450+$15,250+x

x=$61,000-$27,450-$15,250

x=$18,300

inventory turnover=$400,000/$18,300

inventory turnover=21.86x

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Full question?

Monroe Manufacturing has a quick ratio of 2.00x, $27,450 in cash, $15,250 in accounts receivable, some inventory, total current assets of $61,000, and total current liabilities of $21,350. The company reported annual sales of $400,000 in the most recent annual report.

Over the past year, how often did Monroe Manufacturing sell and replace its inventory?

If the company reported annual sales of $800,000 in the most recent annual report. how often Monroe Manufacturing will sell and replace its inventory is: 34.41x.

Inventory

Using this formula

Inventory=Annual sales/[Total current assets-(Total current liabilities× Quick ratio)]

Let plug in the formula

Inventory=$800,000/[$77,500 - ($27,125 x 2)]

Inventory=$800,000/[$77,500 -$54,250]

Inventory=$800,000/$23,250

Inventory=34.408x

Inventory=34.41x

Therefore If the company reported annual sales of $800,000 in the most recent annual report. how often Monroe Manufacturing will sell and replace its inventory is: 34.41x.

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The complete question is:

Monroe Manufacturing has a quick ratio of 2.00x, $34,875 in cash, $19,375 in accounts receivable, some inventory, total current assets of $77,500, and total current liabilities of $27,125. The company reported annual sales of $800,000 in the most recent annual report.

Over the past year, how often did Monroe Manufacturing sell and replace its inventory?

2.86x

37.85x

34.41x

8.01x

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