Alpha Company Would Like to Estimate How Long It Will

question 44

Essay

Alpha Company would like to estimate how long it will take to realize cash from its ending inventory.For this purpose the following data are submitted:
$\begin{array}{c}\begin{array}{lll} \text {Accounts Receivable, less allowance for doubtful accounts of \( \$ 40,000 \) }\\ \text {Ending Inventory}\\ \text {Net Sales}\\\text { Cost of Goode Sold }\end{array}\begin{array}{lll}\$660,000\\750,00\\5,650,000\\4,250,000\end{array}\end{array}$

$\text { Days' Sales in Inventory } = \frac { \text { Ending Inventory } } { \text { Cost of Goods Sold } / 365 }$
$\text { Days' Sales in Receivables } = \frac { \text { Gross Receivables } } { \text { Net Sales } / 365 }$
Required:
Estimate how long it will take to realize cash from the ending inventory.

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Definitions:

Prenatal Babies

Refers to the stage of human development inside the womb before birth.

Neonates

Newborn infants, especially within the first 28 days after birth.

Growth Spurts

Rapid physical development and height increases, often occurring during puberty.

Growth In Infancy

The rapid physical and psychological development occurring in human beings between birth and the end of the second year of life.