Q21. Inventory turnover ratio How is the inventory turnover ratio calculated? A21. Inventory turnover ratio = Cost of goods sold / Average inventory [Entity 21-a]
Q22. Depreciation On January 1, 20×1, Entity A purchased equipment at $90,000. The equipment is expected to have $9,000 residual value at the end of
Q21. Purchase of equipment Entity A purchased equipment and issued a promissory note to pay $26,000 three months later. Prepare a journal entry to record
Q20. Allowance for doubtful accounts On December 31, 20×1, Entity A had $150,000 balance of accounts receivable. It is estimated that 3% of accounts receivable
Section 3. Activity Ratios Q20. Assets turnover ratio How is the assets turnover ratio calculated? A20. Assets turnover ratio = Sales / Average total assets
Q19. Du Pont analysis What is the Du Pont analysis of the return on assets (ROA)? A19. Du Pont analysis shows that the return on