Turnover Ratios for Accounts Receivable and Inventory
Ken’s and Den’s Recreational Products,Inc., reports the following information in its 2000 financial statements:
|
Balance (dollars in millions) |
||
|
January 1, 2000 |
December 31, 2000 |
|
|
Accounts receivable (gross) |
$14 |
$12 |
|
Allowance for uncollectible accounts |
1 |
2 |
|
Inventory |
20 |
26 |
|
During 2000: |
||
|
Sales |
80 |
|
|
Cost of goods sold |
55 |
|
Required
Determine Ken’s and Den’s accounts receivable collection period ratio and the number of days’ sales in ending inventory during 2000.