Refer to the Following Selected Financial Information from Texas Electronics

question 172

Multiple Choice

Refer to the following selected financial information from Texas Electronics. Compute the company's inventory turnover for Year 2. $\begin{array}{lrr}& \text { Year 2 } & \text { Year 1 } \\\text { Cash } & \$ 37,500 & \$ 36,850 \\\text { Short-term investments } & 90,000 & 90,000 \\\text { Accounts receivable, net } & 85,500 & 86,250 \\\text { Merchandise inventory } & 121,000 & 117,000 \\\text { Prepaid expenses } & 12,100& 13,500\\\text { Plant assets } & 388,000 & 392,000 \\\text { Accounts payable } & 113,400 & 111,750 \\\text { Net sales } & 711,000 & 706,000 \\\text { Cost of goods sold } & 390,000 & 385,500\end{array}$

• A) 4.72.
• B) 4.33.
• C) 3.28.
• D) 5.78.
• E) 3.86.

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Definitions:

Voluntary Deductions

Deductions from an employee's paycheck that the employee chooses to have withheld for benefits such as retirement plans, health insurance, and union dues.

Gross Pay

The total earnings of an employee for a payroll period.

FICA Taxes

Taxes required by the Federal Insurance Contributions Act, funding Social Security and Medicare, deducted from employees' paychecks and matched by employers.

Social Security

A government program providing economic assistance to persons with inadequate or no income, funded by taxes on workers and employers.