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Ratio Acid Test A/R Turnover Days in Inventory PROBLEM 2 (20 Points) The following information was contained in the financial statements of the Quercus Corporation, which started business January 1, 2014 (only accounts at the start were Cash and Common Stock). All amounts are in thousands of dollars. 2016 2015 S12 S14 S66 S35 S6 2017 2014 S10 S12 $44 S28 ($8) A/R (term, n/30) Net Sales (3/4 on credit) Cost of Goods Sold Net Income (Loss) S16 S20 S80 S50 $12 S20 S28 S100 S62 S15 REQUIRED: Complete the following table for Quercus Corporation. Carry out all work 5 decimal laces before converting to percentages 2016 2017 Times A/R Turnover Days to Collect Gross Profit % Times Inventory Turnover
Expert Answer
| Information given | $ in thousands | |||
| Particulars | 2014 | 2015 | 2016 | 2017 |
| A. A/R (term, n/30) | $ 10 | $ 12 | $ 16 | $ 20 |
| B. Inventory | $ 12 | $ 14 | $ 20 | $ 28 |
| C. Net Sales (3/4 on Credit) | $ 44 | $ 66 | $ 80 | $ 100 |
| D. Cost of Goods Sold | $ 28 | $ 35 | $ 50 | $ 62 |
| E. Net Income /(Loss) | $ (8) | $ 6 | $ 12 | $ 15 |
| Required | ||||
| Times A/R Turnover (C/A) | 4.4 | 5.5 | 5 | 5 |
| F. Credit Sales | $ 33 | $ 50 | $ 60 | $ 75 |
| Days To Collect (F/A*30) | 99 | 123.75 | 112.5 | 112.5 |
| G. Gross Profit (C-D) | $ 16 | $ 31 | $ 30 | $ 38 |
| Gross Profit % (G/C*100) | 36% | 47% | 38% | 38% |
| Times Inventory Turnover (C/B) | 3.67 | 4.71 | 4.00 | 3.57 |
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Question & Answer: Ratio Acid Test A/R Turnover Days in Inventory PROBLEM 2 (20 Points) The following information was contained in the financial state…..
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