Balance Sheet Cole Eagan Enterprises December 31, 2013 $4,500 Cash Accounts Payable Notes Payable $10,000 Accounts Receivable Inventory Accruals 1,000 Total Current Assets Total Current Liabilities Long-Term Debt Stockholders' Equity Net Fixed Assets Total Assets Total Liabilities & S.E. Information supporting the table above is below and is used to answer the question. • Sales totaled $110,000 • Cost of goods sold was $82,500 • Inventory days on hand was 120 • The average collection period was 65 days Accounts receivable for Cole Eagan in 2013 was . (see table above) a) $14,056 b) $19,589 c) $14,691 d) $18,333
Balance Sheet Cole Eagan Enterprises December 31, 2013 $4,500 Cash Accounts Payable Notes Payable $10,000 Accounts Receivable Inventory Accruals 1,000 Total Current Assets Total Current Liabilities Long-Term Debt Stockholders' Equity Net Fixed Assets Total Assets Total Liabilities & S.E. Information supporting the table above is below and is used to answer the question. • Sales totaled $110,000 • Cost of goods sold was $82,500 • Inventory days on hand was 120 • The average collection period was 65 days Accounts receivable for Cole Eagan in 2013 was . (see table above) a) $14,056 b) $19,589 c) $14,691 d) $18,333
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
![**Educational Content: Understanding a Balance Sheet**
### Balance Sheet for Cole Eagan Enterprises
**As of December 31, 2013**
| | Amount |
|-----------------------------------|--------------|
| **Assets** | |
| Cash | $4,500 |
| Accounts Receivable | |
| Inventory | |
| Total Current Assets | |
| Net Fixed Assets | |
| **Total Assets** | |
| | |
| **Liabilities** | |
| Accounts Payable | $10,000 |
| Notes Payable | |
| Accruals | $1,000 |
| Total Current Liabilities | |
| Long-Term Debt | |
| **Stockholders’ Equity** | |
| **Total Liabilities & S.E.** | |
### Supporting Information
In order to answer the question regarding accounts receivable for Cole Eagan Enterprises in 2013, the following supporting details are provided:
- Sales totaled $110,000
- Cost of goods sold was $82,500
- Inventory days on hand was 120
- The average collection period was 65 days
### Problem for Students
Using the information above, determine the accounts receivable for Cole Eagan in 2013.
**Possible Answers:**
a) $14,056
b) $19,589
c) $14,691
d) $18,333
### Explanation of Calculations
The average collection period is the average number of days it takes a company to collect its accounts receivable. Using the formula for calculating accounts receivable:
\[ \text{Accounts Receivable} = \left( \frac{\text{Total Sales}}{365} \right) \times \text{Average Collection Period} \]
Given:
- Total Sales = $110,000
- Average Collection Period = 65 days
\[ \text{Accounts Receivable} = \left( \frac{110,000}{365} \right) \times 65 \]
This calculation is necessary to find the correct amount for accounts receivable.
---
This transcribed content is intended for educational purposes, helping students understand how to read and interpret financial statements, specifically the balance sheet, and support their learning with applicable formulas and problem-solving examples.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d6ce828-7421-4579-a347-7b809a44673d%2F05e8ef11-c2fd-41ef-8736-ed4b6d84624b%2Fehwha57_processed.png&w=3840&q=75)
Transcribed Image Text:**Educational Content: Understanding a Balance Sheet**
### Balance Sheet for Cole Eagan Enterprises
**As of December 31, 2013**
| | Amount |
|-----------------------------------|--------------|
| **Assets** | |
| Cash | $4,500 |
| Accounts Receivable | |
| Inventory | |
| Total Current Assets | |
| Net Fixed Assets | |
| **Total Assets** | |
| | |
| **Liabilities** | |
| Accounts Payable | $10,000 |
| Notes Payable | |
| Accruals | $1,000 |
| Total Current Liabilities | |
| Long-Term Debt | |
| **Stockholders’ Equity** | |
| **Total Liabilities & S.E.** | |
### Supporting Information
In order to answer the question regarding accounts receivable for Cole Eagan Enterprises in 2013, the following supporting details are provided:
- Sales totaled $110,000
- Cost of goods sold was $82,500
- Inventory days on hand was 120
- The average collection period was 65 days
### Problem for Students
Using the information above, determine the accounts receivable for Cole Eagan in 2013.
**Possible Answers:**
a) $14,056
b) $19,589
c) $14,691
d) $18,333
### Explanation of Calculations
The average collection period is the average number of days it takes a company to collect its accounts receivable. Using the formula for calculating accounts receivable:
\[ \text{Accounts Receivable} = \left( \frac{\text{Total Sales}}{365} \right) \times \text{Average Collection Period} \]
Given:
- Total Sales = $110,000
- Average Collection Period = 65 days
\[ \text{Accounts Receivable} = \left( \frac{110,000}{365} \right) \times 65 \]
This calculation is necessary to find the correct amount for accounts receivable.
---
This transcribed content is intended for educational purposes, helping students understand how to read and interpret financial statements, specifically the balance sheet, and support their learning with applicable formulas and problem-solving examples.
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