A manufacturer reports the data below. Accounts payable Accounts receivable Inventory Net sales Cost of goods sold $ 9,649 18,474 5,455 233,607 138,200 (1) Compute the number of days in the cash conversion cycle. (2) Is the company more efficient at managing cash than its competitor who has a cash conversion cycle of 14 days? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the number of days in the cash conversion cycle. Note: Use 365 days in a year. Round calculations to the nearest whole day. Cash conversion cycle days

A manufacturer reports the data below. Accounts payable Accounts receivable Inventory Net sales Cost of goods sold $ 9,649 18,474 5,455 233,607 138,200 (1) Compute the number of days in the cash conversion cycle. (2) Is the company more efficient at managing cash than its competitor who has a cash conversion cycle of 14 days? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the number of days in the cash conversion cycle. Note: Use 365 days in a year. Round calculations to the nearest whole day. Cash conversion cycle days

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 7PB: Review the select information for Liquor Plaza and Beer Buddies (industry competitors) and complete...

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(1) Use the information below to compute the days in the cash conversion cycle for each company. (2) Which company is more effective at managing cash based on this measure? Days' sales in accounts receivable Days' sales in inventory Days' payable outstanding Required 1 Required 2 Sparta Company 36 22 29 Complete this question by entering your answers in the tabs below. Cash conversion cycle Athens Company 49 26 34 Use the information below to compute the number of days in the cash conversion cycle for each company. Sparta Athens Company Company
Teams MSFT Corporation has the following information: Inventory conversion period 79.02 days Receivables collection period 35.8 days Payables deferral period 9.6 days Can you determine the length of time (days) for them to cycle cash in the company? (represent your numeric result in two decimal places)
Directions: Read each senterce carefully and determine whether the statement is TRUE or FALS E. Write your answers on the space provided before each number. 1. At the beginning of the day, you have P200 cash in your pocket. At the end of the day, you have P50 left. If you make a horizontal analysis of your cash, you would conclude that your cash has decreased by 80% during the day. 2. In 2019, Entity A reported sales of P100 and profit of P20. In a vertical analysis, a financial statement user would conclude that Entity A was able to generate 20% profit from every peso of its sales during the period. 3. Entity A reported irventory balances of P100 and P50 in 2019 and 2018, respectively. In a horizontal analysis, a financial statement user would conclude that Entity A's inventory has increased by 50% from2018 to 2019. 4. An analysis of the intenelationships of infomation in a single period, expressed as parcentages of a common denomirator, is called horizortal analysis. 5. A comparison…
An analyst has obtained the following information regarding ABC, Inc. Using this information, he needs to estimate the company's Accounts Payable. Sales = $93,398Cost of Goods Sold (COGS) = $36,052Cash Cycle = 22 daysOperating Cycle = 86 daysAccounts Receivable Period = AR Period = Average Collection Period (ACP) = 40 daysWhat is the company's Accounts Payable balance?
Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…
Mifflin Company reported the following for the current year: Net sales Cost of goods sold Beginning balance in accounts receivable Ending balance in accounts receivable Compute (a) accounts receivable turnover and (b) days' sales uncollected. Hint Accounts receivable turnover use receivable, and days' sales uncollected uses the ending balance in accounts receivable. Complete this question by entering your answers in the tabs below. Accounts Receivable Turnover Compute the days' sales uncollected. Days Sales Uncollected Numerator: 1 1 $ 62,700 41,000 14,600 6,300 Days' Sales Uncollected Denominator: xx Days = = = Days' Sales Uncollected Days' sales uncollected days
a) Calculate Kopitiam Sdn Bud’s accounts receivable turnover ratio for Year 2 and Year 3. b) Calculate the number of days the average balance of receivables is outstanding before being converted into cash (turnover in days) for Year 2 and Year 3 c) What problem do you see with the company’s credit policy if the terms are net 30 days? Explain your answer.
Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…
Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 617,500 Cost of goods sold 292,000 Gross profit 325,500 Operating expenses (excluding depreciation) $ 139,400 Depreciation expense 27,750 167,150 Other gains (losses) Loss on sale of equipment (12,125) Income before taxes 146,225 Income taxes expense 34,050 Net income $ 112,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year…
Additional data related to the first quarter of 2016for HaneyCompany: (Click the icon to view the data.) Read the requirements. Data table Requirement 1. Prepare Haney Company's schedule of cash receipts from customers and sched Begin by preparing the schedule of cash receipts from customers for the first quarter of 2016. Cash Receipts from Customers Total sales Cash Receipts from Customers: Accounts Receivable balance, December 31, 2015 1st Qtr.-Sales Total cash receipts from customers First Quarter 2016 Total sales $ 210,000 Budgeted purchases of direct materials Budgeted direct labor cost 40,600 36,900 Budgeted manufacturing overhead costs: Variable manufacturing overhead 1,225 Depreciation 1,400 Insurance and property taxes 6,850 Budgeted selling and administrative expenses: Salaries expense 7,000 Rent expense 1,800 Insurance expense Depreciation expense Supplies expense 1,400 500 10,500 More info Accounts Receivable balance, March 31, 2016: 1st Qtr.-Sales, collected in 2nd Qtr. s…
Indicate the impact of the following on CASH and OPERATING Cycles, respectively. Use letter (I) to indicate an increase, the letter (D) for a decrease, or the letter (N) for no change. ___;___ a) The cash discounts offered by suppliers are increased: thus, payments are made earlier. ___;___ b) An increasing number of customers begin to py in cash instead of with credit. ___;___ c) Fewer raw materials than usual are purchased. ___;___ d) A greater percentage of raw material purchases are paid for with credit. ___;___ e) More finished goods are produced for inventory instead for order.
Compute for Receivable Collection Period, Inventory Conversion Period, Payables Deferral period and Cash Conversion Cycle of Company ABS for the following data Ave. Receivables P1,850,450 659,800 Net Credit Sales, Cost of Sales 3,180.430 1,740.200 Ave. Inventory Ave. Payables 520,300 Compare Company ABS's Cash Conversion Cycle to Company CBN which has 194 days of cC. Which company has better conversion cycle and why?