Analysis of Activity Measures Based on the comparative income statement and balance sheet of Cowan Kitchen Counters,
Question:
Analysis of Activity Measures Based on the comparative income statement and balance sheet of Cowan Kitchen Counters, Inc., that follow:
Cowan Kitchen Counters, Inc. Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 20-1 N
et Sales (all on account) $2,584,000 $2,163,000
Cost of goods sold 1,868,200 1,616,800
Gross profit $715,800 $546,200
Operating expenses 315,200 221,800
Other expense (interest) 24,200 24,200
Income tax expense 176,800 106,300
Net income $199,600 $193,900
Cowan Kitchen Counters, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1
Cash $255,400 $243,200
Government notes 250,000 250,000
Accounts receivable (net) 903,500 797,500
Merchandise inventory 983,600 913,600
Supplies and prepayments 143,200 47,500
Land 108,200 108,200
Building (net) 330,000 390,600
Office equipment (net) 17,700 15,000
Total assets $2,991,600 $2,765,600
Current liabilities (accounts payable) $703,000 $532,000
Bonds payable 220,000 240,000
Total liabilities $923,000 $772,000
Common stock ($10 par, 180,000 shares) $1,800,000 $1,800,000
Retained earnings 268,600 193,600
Total stockholders' equity $2,068,600 $1,993,600
Total liabilities and stockholders' equity $2,991,600 $2,765,600
Compute the following activity measures for 20-2 (round all calculations to two decimal places): Use 365 days when computing the accounts receivable and merchandise inventory turnover.
a. Accounts receivable turnover fill in the blank days.
b. Merchandise inventory turnover fill in the blank days.
c. Asset turnover fill in the blank 3 0.90 to 1.
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