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The aging schedule of a firm shows that 40 percent of the receivables are collected in 18 days and the remaining 60 percent of the receivables are collected in 50 days. As a result, the firm's days sales outstanding (DSO) is _____.
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- Which one of the following statements is correct if a firm has a receivables turnover of 10? It takes the firm 10 days to collect payment from its customers. It takes the firm 36.5 days to sell its inventory and collect the payment from the sale. It takes the firm an average of 36.5 days to sell its items. The firm collects on its sales in an average of 36.5 days. The firm has ten times more in accounts receivable than it does in cash.Following is the aging schedule for Lure Corporation: Account Age Amount Outstanding Average Days 0-30 days $75,000 21 31-60 days $50,000 37 over 60 days $27,000 ? If its DSO is 39 days on average, on what day does Lure Corporation collect from customers who take longer than 60 days to pay for thier purchases?ABC Inc. has the following data. What is the firm's cash (conversion) cycle? Inventory Conversion Period = 38 days Receivables Collection Period = 19 days Payables Deferral Period = 26 days
- Calculate the average collection period, average payment period, inventory turnover period and cash conversion cycle for the following firm (1Year = 360 Days): Income statement data: Sales 10000, COGS 9000 Balance sheet data: Inventory 1100, Accounts receivable 400, Accounts payable 600 What effect will all the following activities have on the cash conversion cycle? the company reduces the level of inventory by 10%, the company changes the terms of sale and 60% of customers pay after 5 days while the remaining pay after 30 days (with sales on the same level) and the company has extended its own payment conditions by one week.An analyst has obtained the following information regarding ABC, Inc. Using this information, he needs to estimate the company's Accounts Payable. Sales = $93,398Cost of Goods Sold (COGS) = $36,052Cash Cycle = 22 daysOperating Cycle = 86 daysAccounts Receivable Period = AR Period = Average Collection Period (ACP) = 40 daysWhat is the company's Accounts Payable balance?Marston Company has outstanding accounts receivable totaling €7.5 million as of December 31 and sales on credit during the year of €20 million. There is also a credit balance of €18,000 in the allowance for doubtful accounts. After aging its receivables, the company estimates that 2% of its receivables will be uncollectible. What will be the balance for the Allowance for Uncollectible Accounts after the year-end adjustment is made to record bad debt expense?
- ABC Corp has an average inventory period (production process time + time before sale) of 36 days. Accounts receivables are outstanding an average of 14 days. Gross margins for the firm average 8%. What is the average length of the firm's short-term operating cycle? Step by step explanation needed. Do it correctly I'll rate.Dome Metals has credit sales of $342,000 yearly with credit terms of net 45 days, which is also the average collection period. Dome does not offer a discount for early payment, so its customers take the full 45 days to pay. a. What is the average receivables balance? (Use a 360-day year.)b. What is the receivables turnover? (Use a 360-day year.)Viper Construction’s days sales outstanding is 50 days (on a 365-day basis). The company’s accounts receivable equal $100 million and its balance sheet shows inventory equal to $125 million. What is the average number of days that the receivables of Viper Construction remain outstanding before they are collected? *
- Grab Co. has a normal operating cycle of 60 days. The average age of inventory is 30 days. The annual credit sales of the company amounted to P1,800,000. What is the company’s average accounts receivable balance? (Use 360 day-year)4. On average it takes Acme Tool Company 80 days to collect on its sales receivables, and its operating cycle is 290 days. a. How long is cash typically tied up in inventories? (Show computations) b. What would be the likely effect to Acme's operating cycle if the company changes its current policy that sales upon credit must be paid within 3 months, instead requiring payment within 2 months? (No calculations needed, just describe the likely effect on Acme's operating cycle.)Route Canal Shipping Company has the following schedule for aging of accounts receivable: Age of Receivables April 30, 20X1 (3) (2) Age of Account 0-30 31-60 61-90 91-120 (1) Month of Sales April March February January Total receivables Month of Sales April March a. Calculate the percentage of amount due for each month. February January Amounts $120,540 86,100 103,320 34,440 $344,400 Total receivables Percent of Amount Due % % % do (4) Percent of Amount Due % 100 % 100%
