Darlington Company experienced the following business events during its first month of operations. The company uses the perpetual Inventory system.1) The company purchased $14,400 of merchandise on account under terms 2/10, n/30.2) The company returned $3,100 of merchandise to the supplier before payment was made.3) The llability was paid within the discount period.4) All of the merchandise purchased was sold for $22,600 cash.What is the net cash flow from operating activities as a result of the four transactions?Multiple Choice$11,526$11,074$5,100$8,200 Which of the following statements is not correct regarding the importance of Inventory turnover to a company's profitability?Multiple ChoiceA company's profitability is affected by the spread between cost and selling price.It is sometimes more desirable to sell a large amount of merchandise with a small amount of gross margin than a small amount of merchandise with a large amount of gross margin.Companies will prefer to have a low inventory turnover rather than a high inventory turnover.A company's profitability is affected by how rapidly inventory sells.

Cash flow from operating activities consists of cash inflows and cash outflows from day to day…

Answered: Darlington Company experienced the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On June 1, Calumet Corp. paid $25,000 for inventory previously purchased on account. Which of the following statements is correct with respect to how this transaction should be shown on the transaction worksheet? Select one: a. The cash account will decrease and the deferred revenue account will decrease. b. The inventory account will decrease and the cash account will decrease. c. The cash account will decrease and the accounts payable account will decrease. d. The cash account will decrease and the retained earnings account will decrease. e. The cash account will increase and the accounts payable account will increase.
LaRoe Lawns’ inventory increased during the year by $5.9 million. Its accounts payable increased by $4.8 million during the same period.Required: What is the amount of cash LaRoe paid to suppliers of merchandise during the reporting period if its cost of goods sold was $56 million? Prepare a summary entry that represents the net effect of merchandise purchases during the reporting period. Record the net effect of merchandise purchases.
AB Ltd. has MCC has prepared the Income statement including the following data (all sales are on account): Sales $80,000 Cost of Goods Sold Gross Profit Expenses Net Profit $50,000 $ 25,000 $ 10,000 $15,000 The comparative balance sheet shows the following data (by definition, accounts payable relates to merchandise purchases only): End of Year Beginning of Year Accounts Receivables (net) Inventory Prepaid Expenses Accounts Payable $7,000 $3,000 $2,000 $1,140 $5,280 $2,000 $1,000 $1,500 Required 1: What is the amount of Cash received from Customers? $ Required 2: What is the amount of Cash paid for merchandise purchase? $
At the beginning of the current period, Penny Worth Corporation had balances in Accounts Receivable of $176,000 and in Allowance for Expected Credit Losses of $8,000 (credit). During the period, Penny Worth had credit sales of $704,000 and collections on account of $671,600. Penny Worth expects a return rate of 5%. Penny Worth uses a perpetual inventory system and determined that the cost of goods sold during the period was $589,600. Penny Worth wrote off as uncollectible, accounts receivable of $6,400. However, a $2,800 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $22,000 at the end of the period. (a) Prepare the entries to record sales, cost of goods sold, and collections during the period. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…
Doak Corporation is evaluating a project with the following cash flows: Year 0 1 2 Cash Flow -$ 53,000 16,700 21,900 27,300 20,400 -8,600 The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach. Combination approach Sover 17.00 % % %
Teal Mountain, Inc. uses a perpetual inventory system. Its beginning inventory consists of 200 units that cost $ 220 each. During August, the company purchased 255 units at $ 220 each, returned 4 units for credit, and sold 375 units at $ 340 each. Journalize the August transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Consider the following financial statement information for the Newk Corporation: Beginning $10,382 Ending $ 11,180 6,181 6,293 Item Inventory Accounts receivable Accounts payable Net sales. Cost of goods sold 5,651 5,952 Operating cycle Cash cycle $ 139,303 87,113 Assume all sales are on credit. Calculate the operating and cash cycles. Note: Do not round intermediate calculations and round your answers to 2 decimal pla 2.19 days days
10) The company recorded cash sales for an additional 12) 20 pairs of shoes for $65 each on the 24th of the month. 11) On the last day of the month, the company estimated sales returns for their sales. They estimate that 2% of sales will be returned. (Hint: use total sales from above) Prepare the appropriate journal entries for each transaction under a perpetual inventory system.

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