Use This Information to Answer the Following Questions:
the Financial

question 6

Multiple Choice

Use this information to answer the following questions:
The financial records of Del Ltd reveal the following at 30 June 2012 :
$\begin{array}{lr} & \$ \\ \text { Net sales for year } & 120,000 \\ \text { Cost of goods sold for year } & 90,000 \\ \text { Inventory, 1 July 2011 } & 27,000 \\ \text { Accounts receivable, 1 July } 2011 & 18,300 \\ \text { Inventory 30 June } 2012 & 33,000 \\ \text { Accounts receivable, 30 June 2012 } & 21,700\end{array}$
-If Del Ltd reduces the number of days' inventory on hand to 60,what will be the new inventory turnover?

• A) 3 times p.a.
• B) 6 times p.a.
• C) 12 times p.a.
• D) 9 times p.a.

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Definitions:

Federal Law

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Grace Period

A set length of time after a due date during which a payment can be made without penalty.

Advanced Notice

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Insurance Company

An entity that provides financial protection and compensation for losses to individuals and entities under the terms of an insurance contract.