Ajax Corporation's Total Current Assets Are Valued at $135,000 and Are

question 216

Multiple Choice

Ajax Corporation's total current assets are valued at $135,000 and are comprised of cash, accounts receivable and inventory. Determine the value of the cash account given the following information: sales = $800,000; cost of goods sold = $300,000; accounts receivable turnover = 32 times; inventory turnover = 10 times.

• A) $70,000
• B) $75,000
• C) $80,000
• D) $85,000
• E) $90,000

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Definitions:

Monthly Sales Volume

The total amount of a product or service sold by a company within the span of a month.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, or insurance.

Monthly Sales Volume

The total quantity of products or services sold by a company in a month.

Fixed Manufacturing Cost

Costs that do not vary with the level of production or sales, such as rent for factory premises, salaries of permanent staff, and depreciation of factory equipment.