Zane Corporation has an inventory conversion period of 81 days, an average collection period of 45 days,
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Question:
Zane Corporation has an inventory conversion period of 81 days, an average collection period of 45 days, and a payables deferral period of 48 days. Assume 365 days in year for your calculations.
a. If Zane's annual sales are $4,042,335 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent.
b. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.
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