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    Average daily sales, cost of goods sold, purchases

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    1. Using the information in exhibit 1 and 2, calculate McGhee's average daily sales, average daily cost of goods sold, average daily purchases, and average operating expenses. How much control does the firm have over each of these iteams?

    *Exhibit 1:
    McGhee Corporation. Balance Sheet, December 31, 2003.
    Cash $140,000
    Accounts receivable $1,225,000
    Inventory $875,000
    Current assets $2,240,000

    Net Fixed assets $2,135,000
    Total Assets $4,375,000

    Accounts payable $700.000
    Accruals $140,000
    Notes payable-bank $788,000
    Current maturities of LT Debt $87,500
    Current liabilities $1,715,000

    Long-term debt $962,500

    Commom stock &PIC $297,000
    Retained earnings $1,400,000
    Total liabilities & equity $4,375,000

    *Exhibit 2:
    Selected Income Statement Information, December 31,2003,
    Sales Revenue, net $15, 968,750
    Cost of Goods Sold, net $10,675,000
    Purchases, net $11,252,500
    Operating expenses 462,500

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    Solution Summary

    The average daily sales, cost of good sold and purchases are examined.