John Doe Company is a manufacturing company. It normally takes 20 days to turn finished goods...

John Doe Company is a manufacturing company. It normally takes 20 days to turn finished goods into sales and another 40 days to receive payments from commercial customers. The company pays its suppliers usually 30 days after receiving the supplies. What is the company's cash conversion cycle?

CCC = days

Solutions

Expert Solution

Operating cycle = days of sales outstanding + days of inventory on hand

Operating cycle = 40+20

Operating cycle = 60

Cash conversion cycle = Operating cycle - days of payables outstanding

Cash cycle = 60-30

Cash cycle = 30

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

You are recently hired as a staff accountant for a small finished goods manufacturing company. Part...

You are recently hired as a staff accountant for a small finished goods manufacturing company. Part of your duties include doing the month end inventory of finished goods. After a few months you do not look forward to this as the amount of inventory seems to be increasing. In order to satisfy your thoughts on this increase of inventory you decide to review the financial information for the last few months. Looking over the Income Statement you see the profits...

You are recently hired as a staff accountant for a small finished goods manufacturing company. Part...

Please answer within the hour 1a. A manufacturing company has a beginning finished goods inventory of...

Please answer within the hour 1a. A manufacturing company has a beginning finished goods inventory of $15,800, raw material purchases of $19,200, cost of goods manufactured of $34,900, and an ending finished goods inventory of $19,000. The cost of goods sold for this company is: $50,700. $22,400. $34,900. $31,700. $30,000. 1b. Use the cost information below for Ruiz Inc. to determine the total manufacturing costs incurred during the year: Work in Process, January 1 $ 51,600 Work in Process, December...

1. A manufacturing company has a beginning finished goods inventory of $16,400, raw material purchases of...

1. A manufacturing company has a beginning finished goods inventory of $16,400, raw material purchases of $19,800, cost of goods manufactured of $36,100, and an ending finished goods inventory of $19,600. Describe and explain the mathematical formula and steps used in computing the cost of goods sold for this company. 2. Based on predicted production of 17,000 units, a company anticipates $255,000 of fixed costs and $216,750 of variable costs. Describe and explain the mathematical formula and steps used in...

During FY 2018, Towson Manufacturing had a beginning finished goods inventory of $18,000 & ending finished...

During FY 2018, Towson Manufacturing had a beginning finished goods inventory of $18,000 & ending finished goods inventory of $17,500. Beginning work-in-process was $14,000 and ending work-in-process was 10,500. Factory overhead was $22,500. The total manufacturing costs amounted to $270,000. Use this information to determine the FY 2018 Cost of Goods Sold. (Round enter as whole dollars only.)

On January 1, 2011, John Doe Enterprises (JDE) acquired a 55% interest in Bubba Manufacturing, Inc....

On January 1, 2011, John Doe Enterprises (JDE) acquired a 55% interest in Bubba Manufacturing, Inc. (BMI). JDE paid for the transaction with $3 million cash and 500,000 shares of JDE common stock (par value $1.00 per share). At the time of acquisition, BMI's book value was $16,970,000. On January 1, JDE stock had a market value of $14.90 per share and there was no control premium in this transaction. Any consideration transferred over book valu is assigned to goodwill....

McGriff Dog Food Company normally takes 24 days to pay for average daily credit purchases of...

McGriff Dog Food Company normally takes 24 days to pay for average daily credit purchases of $9,950. Its average daily sales are $10,060, and it collects accounts in 32 days. a. What is its net credit position? b-1. If the firm extends its average payment period from 24 days to 40 days (and all else remains the same), what is the firm's new net credit position? (Negative amount should be indicated by a minus sign.) b-2. Has the firm improved...

Use the following information for Swansea Manufacturing Company: work in process finished goods Begining Balance $30,000...

Use the following information for Swansea Manufacturing Company: work in process finished goods Begining Balance $30,000 $36,000 Transfers In 50,000 ? Transfers out 44,000 ? Ending Balance ? 30,000 The cost of goods sold for the period was: a. $6,000 b. $56,000 c. $44,000 d. $50,000

mpson Orange Juice Company normally takes 30 days to pay far its average daily credit purchases...

mpson Orange Juice Company normally takes 30 days to pay far its average daily credit purchases af $8.400,.:lts average daily sales are $9,900, and it coHects its accounts irt 34 days.qt . a. What is its net credit position? Net credit position: : " S b. If the firm extends its average payment period from 30 days to 45 days (and all eased remains the same), v/hat is the firm's new-net credit position? (Negativesanswer should be indicated by a minnie...

Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 $ 25,300...

Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 $ 25,300 Beginning Raw Materials, 1/1/18 36,700 Beginning Work in Process, 1/1/18 111,500 Direct Labor for 2018 $ 276,500 Ending Finished Goods, 12/31/18 23,600 Ending Raw Materials, 12/31/18 40,850 Ending Work in Process, 12/31/18 121,800 Material Purchases for 2018 305,400 (including $21,000 of indirect material) Note: The pre-determined overhead rate is 0.87 (87%) of direct labor cost. Required: 1. Prepare a Cost of Goods Manufactured report....

Subjects