Selected Information Taken from the Accounting Records of Rigor Company

question 90

Essay

Selected information taken from the accounting records of Rigor Company follows:
$\begin{array}{lr}\text { Net accounts receivable at December } 31,2013 & \$ 800,000 \\\text { Net accounts receivable at December 31, 2014 } & \$ 900,000 \\\text { Accounts receivable turnover } & 7 \text { to } 1\\\text { Inventories at December } 31,2013 & \$ 1,000,000 \\\text { Inventories at December } 31,2014 & \$ 1,200,000 \\\text { Inventory turnover } & 3 \text { to }1\end{array}$
Required:
a.What was Rigor's gross margin for 2014?
b.Suppose there are 360 business days in the year.What was the number of days' sales outstanding in average receivables and the number of days' sales outstanding in average inventories for 2014,respectively?

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Definitions:

Elitist

Pertaining to a belief or attitude that a select group of people with a certain ancestry, intrinsic quality, high intellect, wealth, or who have specific, desirable affiliations are entitled to lead or enjoy special status.

Anti-democratic

Opposed to democratic principles, often favoring centralized control or leadership without the same level of input or influence from the general population.

Upper-management Levels

The highest tier in an organization's management hierarchy, responsible for strategic decision-making and company-wide policy setting.

Conceptual Clarity

The state of having a clear and coherent understanding of an idea or concept, free from confusion or ambiguity.