Question

In: Finance

A company has inventory balance of $24,935, accounts receivable of $9,902, and accounts payable of $14,652....

A company has inventory balance of $24,935, accounts receivable of $9,902, and accounts payable of $14,652. If the credit sales are $186,978 and cost of goods sold are $132,477, what is the company's cash (conversion) cycle in number of days? (Use ending balances and assume 365 days in a year.)

Solutions

Expert Solution

Inventory(I) = 24,935

Accounts receivable(AR) = $9,902

Accounts payable(AP) = $14,652

Credit sales(CS) = $186,978

Cost of goods sold(COGS) = $132,477

In order to calculate Cash Conversion Cycle (CCC) we need to calculate Days inventory outstanding (DIO), Days Sales outstanding (DSO) and Days payable outstanding (DPO)

And, Cash Conversion Cycle (CCC) would be:

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

A company has inventory balance of $24,318, accounts receivable of $9,637, and accounts payable of $14,365....
A company has inventory balance of $24,318, accounts receivable of $9,637, and accounts payable of $14,365. If the credit sales are $183,030 and cost of goods sold are $128,952, what is the company's cash (conversion) cycle in number of days? (Use ending balances and assume 365 days in a year.) A) 36.59 B) 37.61 C) 38.63 D) 39.64 E) 40.66
BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable...
BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for the company are indicated in the working papers. Below are a series of transactions for BeachTime Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 57% of the sales price. Jan.3  Sell merchandise on account to M. Knast $2,900, invoice...
BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable...
BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for the company are indicated in the working papers. Below are a series of transactions for BeachTime Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 57% of the sales price. Jan.3  Sell merchandise on account to M. Knast $2,900, invoice...
Account Beginning Balance Ending Balance Inventory $2,600 $2,890 Accounts receivable $3,222 $2,800 Accounts payable $2,500 $2,670...
Account Beginning Balance Ending Balance Inventory $2,600 $2,890 Accounts receivable $3,222 $2,800 Accounts payable $2,500 $2,670 Net sales $24,589 Cost of goods sold $19,630 What is the operating cycle? a. 51.04 days b. 95.74 days c. 48.07 days d. 99.11 days Following Question 1, what is the cash cycle? a. 44.70 days b. 48.07 days c. 47.67 days d. 51.04 days
accounts payable and accounts receivable
What is the difference between accounts payable and accounts receivable?
An Accounts Payable of balance of $-70 got posted to Accounts Receivable in amount of $70...
An Accounts Payable of balance of $-70 got posted to Accounts Receivable in amount of $70 in error. To reverse this out, do we credit is the journal entry- Credit - AR 70 and Debit AP 70? The oringinal amount was -70 in AP but it was a positive 70 in AR.
Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt...
Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt impacted cash flow from one year to the next. 200-word minimum.
Increase in accounts payable Increase in accruals Decrease in accounts receivable Increase in Inventory Increase in...
Increase in accounts payable Increase in accruals Decrease in accounts receivable Increase in Inventory Increase in Property, Plant and Equipment Decrease in Long-term Debt Increase in Net Income A. Use of Cash B. Source of Cash
REQUIRED: Prepare General Ledger, Accounts Receivable Ledger, Accounts Payable Ledger, Trial Balance, Schedule of Accounts Receivable...
REQUIRED: Prepare General Ledger, Accounts Receivable Ledger, Accounts Payable Ledger, Trial Balance, Schedule of Accounts Receivable and Schedule of Accounts Payable from the following information and Journals using T Accounts with a balance column. Grassley Company completes these transactions during November of the current year (terms for all its credits sales are 2/10, n/30). Nov.1 Purchased $5,058 of office equipment on credit from Brun supply, invoice dated November 1, terms n/10 EOM. 2 Borrowed $88, 500 cash from Wisconsin Bank...
Presented below is a list of balance sheet accounts. Accounts payable Land (in use) Accounts receivable...
Presented below is a list of balance sheet accounts. Accounts payable Land (in use) Accounts receivable Long-term investments Accumulated depreciation—buildings Notes payable (due in 6 months) Accumulated depreciation—equipment Notes receivable (due in 2 years) Allowance for uncollectible accounts Patent Bonds payable (due in 10 years) Preferred stock Buildings Prepaid expenses Cash Rent payable (current) Common stock Restricted cash (to be used in 10 years) Copyright Retained earnings Equipment Short-term investments Interest receivable (due in three months) Taxes payable Inventories Wages...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT