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Inventory & AC Turnover

Islander Company Data:
As of December 31,
Balance Sheet Data 2011 2010
Accounts receivable $500,000 $470,000
Allowance for doubtful accounts (25,000) (20,000)
Net accounts receivable $475,000 $450,000
Inventories - lower of cost or market $600,000 $550,000

Year Ended December 31,
Income Statement Data 2011 2010
Net credit sales $2,500,000 $2,200,000
Net cash sales 500,000 400,000
Net sales $3,000,000 $2,600,000
Cost of goods sold $2,000,000 $1,800,000
Selling, general, and administrative expenses 300,000 270,000
Other 50,000 30,000
Total operating expenses $2,350,000 $2,100,000

a. What is the accounts receivable turnover for 2011?
b. What is the inventory turnover for 2011?

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Islander Company Data:
As of December 31,
Balance Sheet Data 2011 2010
Accounts receivable $500,000 $470,000
Allowance for doubtful accounts (25,000) (20,000)
Net accounts receivable $475,000 $450,000
Inventories ...

Solution Summary

Islander Company Data:
As of December 31,
Balance Sheet Data 2011 2010
Accounts receivable $500,000 $470,000
Allowance for doubtful accounts (25,000) (20,000)
Net accounts receivable $475,000 $450,000
Inventories - lower of cost or market $600,000 $550,000

Year Ended December 31,
Income Statement Data 2011 2010
Net credit sales $2,500,000 $2,200,000
Net cash sales 500,000 400,000
Net sales $3,000,000 $2,600,000
Cost of goods sold $2,000,000 $1,800,000
Selling, general, and administrative expenses 300,000 270,000
Other 50,000 30,000
Total operating expenses $2,350,000 $2,100,000

a. What is the accounts receivable turnover for 2011?
b. What is the inventory turnover for 2011?

$2.19