Computation of various balance sheet ratios.
Scully Corporation's comparative balance sheets are presented below.
|
SCULLY CORPORATION
|
|
Balance Sheets
|
|
31-Dec
|
|
|
2008
|
2007
|
|
Cash
|
$4,300
|
$3,700
|
|
Accounts receivable
|
21,200
|
23,400
|
|
Inventory
|
10,000
|
7,000
|
|
Land
|
20,000
|
26,000
|
|
Building
|
70,000
|
70,000
|
|
Accumulated depreciation
|
-15,000
|
-10,000
|
|
Total
|
$110,500
|
$120,100
|
|
Accounts Payable
|
$12,370
|
$31,100
|
|
Common Stock
|
75,000
|
69,000
|
|
Retained earnings
|
23,130
|
20,000
|
|
Total
|
$110,500
|
$120,100
|
Scully's 2008 income statement included net sales of $100,000, cost of goods sold of $60,000, and net income of $15,000.
Instructions
Compute the following ratios for 2008.
a) Receivables turnover= Net credit sales/ Average net receivables
b) Inventory turnover
Inventory turnover = Cost of goods sold / Average inventory