Extracts from the statement of comprehensive income for the year ended 31 December are as follows: Revenue Cost of sales Gross profit • ☐ C Additional information: It is the policy of the firm to mark all its goods at a constant markup of 25% on cost. The interest expense for the year ended 31 December 2023 amounted to R24 000, and for the year ended 31 December 2022, R20 000. 40% of all sales are on cash. Purchases equal 85% of cost of sales. 90% of all purchases are on credit. Assume a 365-day year. Industry-wide averages are as follows: Gross profit percentage is 33%. Net profit percentage is 20%. Trade debtors' collection period is 60 days. Trade creditors settlement periods 41 days. Inventory turnover is 8 times per year. . D E C M 2023 R a 900 000 ? 210 000 2022 R 650 000 ? 130 000 REQUIRED: Calculate the Trade debtors' collection period for both financial years ended 31 December 2023 and 2022, and interpret the results: Show the formula and your calculations. Round off all answers to 2 decimal places.

Extracts from the statement of comprehensive income for the year ended 31 December are as follows: Revenue Cost of sales Gross profit • ☐ C Additional information: It is the policy of the firm to mark all its goods at a constant markup of 25% on cost. The interest expense for the year ended 31 December 2023 amounted to R24 000, and for the year ended 31 December 2022, R20 000. 40% of all sales are on cash. Purchases equal 85% of cost of sales. 90% of all purchases are on credit. Assume a 365-day year. Industry-wide averages are as follows: Gross profit percentage is 33%. Net profit percentage is 20%. Trade debtors' collection period is 60 days. Trade creditors settlement periods 41 days. Inventory turnover is 8 times per year. . D E C M 2023 R a 900 000 ? 210 000 2022 R 650 000 ? 130 000 REQUIRED: Calculate the Trade debtors' collection period for both financial years ended 31 December 2023 and 2022, and interpret the results: Show the formula and your calculations. Round off all answers to 2 decimal places.

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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