Use the Selected Data from Pinecrest Company's Financial Statements to Answer

question 44

Multiple Choice

Use the selected data from Pinecrest Company's financial statements to answer the following question. $$\begin{array} { l r r } & \underline { 2017 } & \underline { 2016 } \\\text { Cash } & \$ 22,000 & \$ 14,000 \\\text { Accounts receivable } & 42,000 & 16,000 \\\text { Merchandise inventory } & 22,000 & 83,000 \\\text { Prepaid expenses }& \underline { 23,000 } & \underline { 18,000 } \\\text { Total current assets } & \underline { \mathbf { \$ 1 0 9 , 0 0 0 } } & \underline { \mathbf { \$ 1 3 1 , 0 0 0 } } \\\\\text { Total current liabilities } & \$ 65,000 & \$ 72,000 \\\text { Net credit sales } & 221,000 & 326,000 \\\text { Cost of goods sold } & 168,000 & 299,000 \\\text { Net cash flow from operating activities } & 16,000 & 29,000\end{array}$$ ​
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-Refer to the data for Pinecrest Company. ?
Competitors in Pinecrest Company's industry have an average inventory turnover of 20.8 times.Its inventory turnover for 2017

• A) indicates that the company has too little inventory on hand at the end of 2017.
• B) indicates that the company is pricing its products too low.
• C) is equal to the number of days' sales in the company's inventory.
• D) indicates that the market may be reacting to problems in the sales department by reducing demand for the company's products.

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Definitions:

Urethra

The tube that conducts urine from the bladder to the outside of the body in both sexes, and also transports semen in males.

Transitional Epithelium

A type of epithelial tissue that can stretch and change its shape, found in areas such as the bladder.

Urinary Bladder

A hollow muscular organ that stores urine from the kidneys before it is excreted through the urethra.

Stratified Squamous

A type of epithelial tissue composed of multiple layers of flat cells, providing protection in areas of high abrasion.