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Average daily sales, cost of goods sold, purchases

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

Solution Summary

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

$2.19