Following Are the Financial Statements for Starman Corporation for the Year

question 68

Multiple Choice

Following are the financial statements for Starman Corporation for the year ended December 31,20xx.Assume that all balance sheet amounts represent both average and ending figures.
$\begin{array}{c}\text { Starman Corporation}\\\text { Balance Sheet}\\\text { December \( 31,20 \mathrm{xx} \) }\\\begin{array}{lcr}&\text { Assets }&\\\text { Cash } && \$ 20,000 \\\text { Marketable securities } && 30,000 \\\text { Accounts receivable } && 50,000 \\\text { Inventory } && 100,000 \\\text { Long-term receivables } && 35,000 \\\text { Property, plant, and equipment } && \underline{65,000} \\\text { Total assets }& & \underline{\$ 300,000}\\&\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } && \$ 100,000 \\\text { Long-term liabilities } && 60,000 \\\text { Stockholders' equity } && 140,000 \\\text { Total liabilities and stockholders' equity } && \$ 300,000\end{array}\end{array}$

$\begin{array}{c}\text { Starman Corporation}\\\text { Income Statement }\\\text { For the Year Ended December 31, 20xx}\\\begin{array}{lr}\text { Net sales } & \$ 400,000 \\\text { Cost of goods sold } & \$ 40,000 \\\text { Gross margin }& \$ 160,000 \\ \text { Operating expenses } & 40,000 \\\text { Income before income taxes } & \$ 120,000 \\\text { Income taxes expense } & \$ 30,000 \\\text { Net income } & \$ 90,000\end{array}\end{array}$
What is the receivable turnover for this corporation?

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Definitions:

Bankruptcy

A legal procedure for dealing with debt problems of individuals and businesses; officially declared inability to pay outstanding debts.

Promissory Estoppel

A legal principle that prevents a promisor from denying a promise when the promisee relies on it to their detriment.

Consideration

A fundamental concept in contract law that refers to something of value (such as money, a promise, or an act) exchanged between parties as part of a contract.

Bargained-For Exchange

A mutual agreement between parties in which each promises to give something in exchange for a benefit.