Question

Canadian Bacon Inc. financial statements are presented in the table below.

Based on the information in the table, and using a 365-day year, calculate Average Credit Sales per Day.

Round the answers to two decimal places

Balance Sheet December 31, 2011

Cash and marketable securities         $187,000 Accounts payable $217,000

Accounts receivable                           $498,000 Notes payable $51,500

Inventories                                          $799,000 Accrued expenses                               $58,300

Prepaid expenses                               $19,300 Total current liabilities $326,800

Total current assets                             $1,503,300   Long-term debt $215,400

Gross fixed assets                               $1,978,000 Par value and paid-in-capital $128,000

Less: accumulated depreciation          $478,000 Retained Earnings                               $2,333,100

Net fixed assets                                  $1,500,000 Common Equity $2,461,100

Total assets                                         $3,003,300 Total liabilities and owner’s equity       $3,003,300

Income Statement Year of 2011

Net sales (all credit)                                        $5,386,600.00

Less: Cost of goods sold                                 $3,716,754.00

Selling and administrative expenses             $329,000.00

Depreciation expense $138,000.00

EBIT $1,202,846.00

Interest expense                                              $39,600.00

Earnings before taxes $1,163,246.00

Income taxes                                                   $465,298.40

Net income $697,947.60

Answer 1

Solution:-

Calculation of Average credit sales per day of Canadian Bacon inc;

Average credit sales per day = Net sales(credit) / No. of days in a year

Given,

Net sales(credit) = $5,386,600

No. of days in a year = 365 days

Average credit sales per day = $5,386,600 / 365

= $14,757.8082

Therefore Average credit sales per day of Canadian Bacon inc. is $14,757.81