Mantle Company has been in business several years. At the end of the current year, the unadjusted
Question:
Mantle Company has been in business several years. At the end of the current year, the unadjusted balances show:
Accounts Receivable.........................$ 310,000
Sales Revenue....................................2,200,000
Allowance for Doubtful Accounts...........5,700
Bad debts are estimated to be 7% of receivables. Record adjustment to Allowance for Doubtful Accounts in a tabular summary. Compute inventory turnover and assess inventory level.
Step by Step Answer:
Bad debt exp Accts rec x Uncoll percent Unadj bal in a...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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