Question
In: Accounting
Natcher Corporation’s accounts receivable at the end of Year 2 was $148,000 and its accounts receivable...
Natcher Corporation’s accounts receivable at the end of Year 2 was $148,000 and its accounts receivable at the end of Year 1 was $156,000. The company’s inventory at the end of Year 2 was $151,000 and its inventory at the end of Year 1 was $143,000. Sales, all on account, amounted to $1,404,000 in Year 2. Cost of goods sold amounted to $822,000 in Year 2. The company’s operating cycle for Year 2 is closest to: (Round your intermediate calculations to 1 decimal place.)
Multiple Choice
48.9 days
104.9 days
74.4 days
70.8 days
Solutions
Expert Solution
104.9 days
Working:
| # 1 | Average accounts receivable | = | (148000+156000)/2 | = | 1,52,000 | ||||||
| # 2 | Average Inventory | = | (151000+143000)/2 | = | 1,47,000 | ||||||
| # 3 | Inventory turnover ratio | = | Cost of goods sold/Average Inventory | = | 822000 | / | 1,47,000 | = | 5.6 | ||
| # 4 | Days Inventory outstanding | = | Days in a Year/Inventory Turnover ratio | = | 365 | / | 5.6 | = | 65.2 | ||
| # 5 | Accounts Receivable Turnover ratio | = | Net credit sales/Average Accounts receivable | = | 1404000 | / | 1,52,000 | = | 9.2 | ||
| # 6 | Days sales outstanding | = | Days in a Year/Accounts receivable Turnover ratio | = | 365 | / | 9.2 | = | 39.7 | ||
| # 7 | Operating cycle for year 2 | = | Days Inventory outstanding + Days sales outstanding | = | 65.2 | + | 39.7 | = | 104.9 | ||
ekkarill92 answered 2 years agoRelated Solutions
Problem 2. At the end of the current year, Accounts Receivable has a balance of...
Problem 2.
At
the end of the current year, Accounts Receivable has a balance of
$550,000; Allowance for Doubtful Accounts has a credit balance of
$5,500; and net sales for the year total $2,500,000. Using the
aging method (analysis of receivables), the proper balance of
Allowance for Doubtful Accounts is estimated as $25,000.
Determine the amount of the adjusting entry for
uncollectible accounts and journalize the entry.
Date
Account
Title
Debit
Credit
Determine the adjusted balances of the
following...
Accounts payable, end of year $ 9,803 $ 13,748 Accounts receivable, net, end of year 31,885...
Accounts payable, end of year
$
9,803
$
13,748
Accounts receivable, net, end of year
31,885
19,286
Inventory, end of year
12,104
11,655
Net sales
157,000
104,000
Cost of goods sold
76,000
115,000
(1) Use the information above to compute the number of days in the
cash conversion cycle for each year.
(2) Did the company manage cash more effectively in the current
year?
Use the information above to compute the number of days in the
cash conversion cycle for...
roviding for Doubtful Accounts At the end of the current year, the accounts receivable account has...
roviding for Doubtful Accounts At the end of the current year,
the accounts receivable account has a debit balance of $703,000 and
sales for the year total $7,970,000. The allowance account before
adjustment has a credit balance of $9,500. Bad debt expense is
estimated at 3/4 of 1% of sales. The allowance account before
adjustment has a credit balance of $9,500. An aging of the accounts
in the customer ledger indicates estimated doubtful accounts of
$30,400. The allowance account before...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts At the end of the current year,
the accounts receivable account has a debit balance of $821,000 and
sales for the year total $9,310,000. The allowance account before
adjustment has a debit balance of $11,100. Bad debt expense is
estimated at 1/4 of 1% of sales. The allowance account before
adjustment has a debit balance of $11,100. An aging of the accounts
in the customer ledger indicates estimated doubtful accounts of
$35,500. The allowance account before...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts
At the end of the current year, the accounts receivable account
has a debit balance of $1,147,000 and sales for the year total
$13,000,000.
The allowance account before adjustment has a credit balance of
$15,500. Bad debt expense is estimated at 3/4 of 1% of sales.
The allowance account before adjustment has a credit balance of
$15,500. An aging of the accounts in the customer ledger indicates
estimated doubtful accounts of $49,600.
The allowance account before...
The projected balance of accounts receivable at the end of the first year of operations is?
A family friend, Mr. Burn Out availed of the early retirement scheme offered by his employer. He said that he was already tired of the same routine of spending eight full hours in an office doing the same thing for the last twenty years.
Mr. Burn Out plans to get into the field of entrepreneurship. He would invest part of his retirement pay in a business that would deal with the sale of medical supplies to local clinics and hospitals....
At the end of 2018, accounts receivable amounted to $163,000. At the beginning of the year...
At the end of 2018, accounts receivable amounted to $163,000. At
the beginning of the year it was $242,000. Net credit sales for the
year amounted to $720,000 and net income was calculated to be
$197,000.
Determine the days sales outstanding ratio and the accounts
receivable turnover ratio.
Do not enter dollar signs or commas in the input boxes.
Round your answer to 2 decimal places.
Days Sales Outstanding = Answer days
Accounts Receivable Turnover = Answer times
At the end of the year, a company has the following accounts receivable and estimates of...
At the end of the year, a company has the following accounts
receivable and estimates of uncollectible accounts:
1. Accounts not yet due = $76,000: Estimated uncollectible =
7%
2. Accounts 1-30 days past due =$39,000' estimated uncollectible
= 25%
3. accounts more than 30 days past due = $7,000; estimated
uncollectible = 45%
Record the year-end adjustment for uncollectible accounts,
assuming the current balance of the Allowance for Uncollectible
accounts is (1,800 (debit)
Record the bad debt expense
Current Year Prior Year Accounts payable, end of year $ 6,943 $ 10,888 Accounts receivable, net,...
Current Year
Prior Year
Accounts payable, end of year
$
6,943
$
10,888
Accounts receivable, net, end of year
24,625
17,328
Inventory, end of year
9,244
8,575
Net sales
184,000
137,000
Cost of goods sold
94,000
120,000
(1) Use the information above to compute the number of days in the
cash conversion cycle for each year.
(2) Did the company manage cash more effectively in the current
year?
A company’s year-end balance in accounts receivable is $2,000,000. The allowance for uncollectible accounts had a...
A company’s year-end balance in accounts receivable is $2,000,000. The allowance for uncollectible accounts had a beginning-of-year credit balance of $30,000. An aging of accounts receivable at the end of the year indicates a required allowance of $38,000. If bad debt expense for the year was $40,000 and if credit sales for the year were $8,200,000 and $7,950,000 was collected from credit customers, what was the beginning-of-year balance in accounts receivable?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe the principles and operations of movement sensors: Doppler-Effect Velocity sensor and Spring-Mass Accelerometor; State the...
- This is all one question, thank you so much in advance. The Bigbee Bottling Company is...
- For Questions 1-3: consider the following code: public class A { private int number; protected String...
- You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol...
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
ADVERTISEMENT