Ameer Ltd. is a manufacturing company that produces toys for kids. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payments by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the Average inventory processing period from the following financial data. The company had an opening stock of OMR 10,000 during the last year and made a total purchase of 27,000 OMR. The company has returned OMR 2000 worth material due to quality issues. During the last year, the business has paid OMR 3000 as wages and OMR 6000 as salaries. The company sold goods for a total amount of OMR 50,000 of which OMR 20,000 sales was on cash basis. Average debtors during the last year was 10,000 OMR, average creditors were 15,000 OMR and closing inventory was OMR 8,000. Choose Average Inventory conversion period of Ameer Ltd. from the following? 188.23 109.50 120.12 125.35

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ameer Ltd. is a manufacturing company that produces toys for kids. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payments by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the Average inventory processing period from the following financial data.

The company had an opening stock of OMR 10,000 during the last year and made a total purchase of 27,000 OMR. The company has returned OMR 2000 worth material due to quality issues. During the last year, the business has paid OMR 3000 as wages and OMR 6000 as salaries. The company sold goods for a total amount of OMR 50,000 of which OMR 20,000 sales was on cash basis. Average debtors during the last year was 10,000 OMR, average creditors were 15,000 OMR and closing inventory was OMR 8,000.

Choose Average Inventory conversion period of Ameer Ltd. from the following?

188.23

109.50

120.12

125.35

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