4. KK Co. normally takes 30 days to pay for its average daily credit purchases of P2,000. Its average daily sales are P3,000, and it collects accounts in 25 days. What is its net credit position? (Note that a negative position implies receivables exceed payables.) A. P1,000 C. P15,000 D. (P15,000) B. (P1,000)

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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4. KK Co. normally takes 30 days to pay for its average daily credit purchases of P2,000. Its average daily sales are
P3,000, and it collects accounts in 25 days. What is its net credit position? (Note that a negative position implies
receivables exceed payables.)
A. P1,000
B. (P1,000)
C. P15,000
D. (P15,000)
5. A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it pays after 67 days.
What is the nominal annual cost of not taking the discount? (Assume a 365-day year.)
A. 21.71%
B. 22.07%
C. 22.95%
E. 24,52%
D. 23.48%
6. GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30 days after the invoice
date. Net purchases amount to P730,000 per year. On average, how much "free" trade credit does GFB Co. receive
during the year? (Assume a 365-day year.)
А. Р30,000
С. Р50,000
E. P70,000
B. P40,000
D. P60,000
Transcribed Image Text:4. KK Co. normally takes 30 days to pay for its average daily credit purchases of P2,000. Its average daily sales are P3,000, and it collects accounts in 25 days. What is its net credit position? (Note that a negative position implies receivables exceed payables.) A. P1,000 B. (P1,000) C. P15,000 D. (P15,000) 5. A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it pays after 67 days. What is the nominal annual cost of not taking the discount? (Assume a 365-day year.) A. 21.71% B. 22.07% C. 22.95% E. 24,52% D. 23.48% 6. GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30 days after the invoice date. Net purchases amount to P730,000 per year. On average, how much "free" trade credit does GFB Co. receive during the year? (Assume a 365-day year.) А. Р30,000 С. Р50,000 E. P70,000 B. P40,000 D. P60,000
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