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22 November, 12:18

Polk Software Inc. has a quick ratio of 2.00x, $32,850 in cash, $18,250 in accounts receivable, some inventory, total current assets of $73,000, and total current liabilities of $25,550. The company reported annual sales of $100,000 in the most recent annual report.

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  1. 22 November, 14:13
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    4.57x

    Explanation:

    Completion of the question

    Over the past year, how often did Polk Software Inc, sell and replace its inventory?

    First, we need to calculate Polk Software's Inventory rom its Total Current Asset

    = Total Current Asset s = $73,000

    Cash - $32,850

    Accounts Receivable = $18,250

    Total Current Assets = Cash + Accounts Receivable + Inventory

    = $73,000 = $32,850 + $18,250 + Inventory

    Inventory = $73,000-$32,850-$18,250

    Inventory = $21,900

    Secondly, calculate inventory turnover

    Inventory turnover = Annual Sales / Inventory

    = $100,000/$21,900

    = 4.57x
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