Among companies to make the comparisons valid select

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among companies to make the comparisons valid.Select the best answer for each of the following questions. The following data were abstracted from the 2007 December 31, balance sheet of Andrews Company (use for the first two questions questions):Cash136,000Marketable Securities64,000Accounts and notes receivable, net184,000Merchandise inventory244,000Prepaid expenses12,000Accounts and notes payable, short-term 256,000Accrued liabilities64,000Bonds payable, long-term400,000The current ratio is:
Benson Company shows the following data on its 2011 financial statements (use for the rest of the questions):Accounts receivable, January 1 $720,000 Accounts receivable, December 31 960,000 Merchandise inventory, January 1 900,000 Merchandise inventory, December 31 1,020,000 Gross sales 4,800,000 Sales returns and allowances 180,000 Net sales 4,620,000 Cost of goods sold 3,360,000 Income before interest and taxes 720,000 Interest on bonds 192,000 Net income 384,0001.The accounts receivable turnover is: Average Accounts Receivable= (AR1 + AR2) / 2
Accounts receivable turnover = Net sales / Average accounts receivableAverage accounts receivable = (720,000 (Jan 1 AR) + 960,000 (Dec 31 (AR)) / 2 = 840,000Accounts receivable turnover = 4,620,000 (Net sales) / 840,000 (Average accounts receivable) = 5.5
2.The inventory turnover is: Inventory turnover = Cost of goods sold (COGS) / Average inventory Average inventory = (900,000 (inv. Jan 1) + 1,020,000 (inv. Dec 31)) / 2 = 960,000Inventory Turnover = 3,360,000 (COGS) / 960,000 (Average Inventory) = 3.5

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