How do I find Net Credit Sales?

I just cannot figure this out. I need to find the "Net Credit Sales" so that I can do the receivables turnover ratio.

Income statement and balance sheet data for Great Adventures, Inc., are provided below.

GREAT ADVENTURES, INC.

Income Statement

For the Year Ended December 31, 2014

Revenues:

Service revenue (clinic, racing, TEAM) 560,000

Sales revenue (MU watches) 138,000

Total revenues $698,000

Expenses:

Cost of goods sold (MU watches) 68,300

Operating expenses 287,276

Depreciation expense 48,500

Interest expense 32,454

Income tax expense 56,800

Total expenses 493,330

Net income $204,670

For the Balance Sheet (below), The first number is for 2014, the second number is for 2013, and the last number is the increase or decrease between years.

GREAT ADVENTURES, INC.

Balance Sheet

December 31, 2014 and 2013

2014 2013 Increase (I) or Decrease (D)

Assets

Current assets:

Cash $ 534,587 ... $144,450... 390,137 (I)

Accounts receivable 43,800 ... 34,100 ... 9,700 (I)

Inventory 15,900... 13,100... 2,800 (I)

Other current assets 12,500 ... 9,200 ... 3,300 (I)

Long-term assets:

Land 487,000... 0 ... 487,000 (I)

Buildings 980,000... 0 ... 980,000 (I)

Equipment 64,000 ... 64,000

Less: Accumulated depreciation (74,750)... (26,250)... 48,500 (I)

Total assets $2,063,037... $238,600

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 13,200 ... $ 10,100... 3,100 (I)

Interest payable 800 ... 800

Income tax payable 58,900... 39,000 ... 19,900 (I)

Long-term liabilities:

Notes payable 549,767... 31,900... 517,867 (I)

Stockholders' equity:

Common stock 111,000 ... 16,000... 95,000 (I)

Paid-in capital 1,145,600 ... 0 ... 1,145,600 (I)

Retained earnings 238,370... 140,800... 97,570 (I)

Treasury stock (54,600)... 0 ... (54,600) (I)

Total liabilities and stockholders' equity $2,063,037 ... $238,600

As you can tell from the financial statements, 2014 was an especially busy year. Tony and Suzie were able to use the $1.24 million received from the issuance of 95,000 shares of stock and hire a construction company for $1 million to build the cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their firstborn son, little Venture Matheson.

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  • 8 years ago
    Favorite Answer

    if your talking bout accounts reicievable turnover its net sales divided by average inventory. not net credit sales , that would be the 698,000 divided by avg. inventory which is 15,900 plus 13,100 =29000 divided by 2 to get avg, =14,500 so you take 698,000 divided by 14,500= 48.13

  • 4 years ago

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