Cash cycle in this case? Morrison Construction, a manufacturer ofcement products, buys raw limestone on crediton July 10. It processes this limestone to makecement powder on July 15 and pays cash for theraw limestone on July 25. On August 2, it sellsthe cement powder to a construction supplycompany, and on August 16, it receives a cashpayment for this sale.What is the length of the cash cycle in thiscase?

Key Concepts1. Cash Cycle (Cash Conversion Cycle)- This is the length of time between when a company…

Answered: Morrison Construction, a manufacturer…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 46P: Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and...

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What is the firm's cash conversion cycle on this accounting question?
If you give me correct answer this general accounting question ??
Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2021, the company had accounts receivable of $1,000,000. Lonergan needs approximately $610,000 to capitalize on a unique investment opportunity. On July 1, 2021, a local bank offers Lonergan the following two alternatives: Borrow $610,000, sign a note payable, and assign the entire receivable balance as collateral. At the end of each month, a remittance will be made to the bank that equals the amount of receivables collected plus 12% interest on the unpaid balance of the note at the beginning of the period. Transfer $660,000 of specific receivables to the bank without recourse. The bank will charge a 3% factoring fee on the amount of receivables transferred. The bank will collect the receivables directly from customers. The sale criteria are met. Required:1. Prepare the journal entries that would be recorded on July 1 for: a. alternative a. b. alternative b. 2. Assuming that…
Inmoo Company's average age of accounts receivable is 89 days, the average age of accounts payable is 40 days, and the average age of inventory is 48 days. Assuming a 365-day year, what is the length of its cash conversion cycle? Please explain process and show calculations.
Discuss Followings: (a) Discuss a total of four (4) factors that are relevant in determining how much cash a business should hold. (b) Discuss the correct interpretation of the operating cash cycle (OCC), whether businesses should try to increase or decrease the OCC, and why. (c) A supplier of electronic components is offering credit terms whereby buyers have a maximum period of 68 days in which to pay for purchases. However, if customers pay within 15 days they receive a 5% discount on the invoice amount. Calculate the exact interest rate implied by the credit terms.
Round to the nearest day.
Xanthe Corporation had the following transactions occur in the current year: 1. Cash sale of merchandise inventory. 2. Sale of delivery truck at book value. 3. Sale of Xanthe common stock for cash. 4. Issuance of a note payable to a bank for cash. 5. Sale of a security held as an available-for-sale investment. 6. Collection of loan receivable. How many of the above items will appear as a cash inflow from investing activities on a statement of cash flows for the current year? Question 128 options: Five items Four items Three items Two items
At the beginning of the year, Oriole Company has a cash balance of $25300. During the year, the company expects cash disbursements of $176000, and cash receipts of $154000. If Oriole Company requires an ending cash balance of $22000, how much must the company borrow? O $0. O $44000. O $18700. O $22000.
Your boss asks you to compute your company's cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $24,800, accounts receivable averaged $18,700, and accounts payable averaged $16,100. You also see that the company had sales of $138,000 and that cost of goods sold was $110,400. Calculate firm's cash conversion cycle. (Use 365 days for calculation. Round intermediate calculations and final answer to 1 decimal place, e.g. 15.1.)
2
Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2024, the company had accounts receivable of $980,000. Lonergan needs approximately $600,000 to capitalize on a unique investment opportunity. On July 1, 2024, a local bank offers Lonergan the following two alternatives: a. Borrow $600,000, sign a promissory note, and assign the entire receivable balance as collateral. At the end of each month, a remittance will be made to the bank that equals the amount of receivables collected plus 8% interest on the unpaid balance of the note at the beginning of the period. b. Transfer $650,000 of specific receivables to the bank without recourse. The bank will charge a 2% factoring fee on the amount of receivables transferred. The bank will collect the receivables directly from customers. The sale criteria are met. Required: 1. Prepare the journal entries that would be recorded on July 1 for: a. alternative a. b. alternative b. 2. Assuming that…
Harrigan Enterprises utilizes Snoopy Systems to design and implement a cash management system. Due to Harrigan’s cash management problems, it cannot currently pay for the system out of pocket. Snoopy chooses to extend a 6% note on January 1, 2013, for the $27,000 project cost. Required: Hide 1. Prepare Snoopy's journal entry to record the service performed on January 1, 2013. Account and Explanation Debit Credit Record sale with note 2. Determine how much interest Snoopy will receive if the note is repaid on May 1, 2013.$ Hide 3. Provide Snoopy's journal entry to record the cash received to pay off the note and interest on May 1, 2013. If an amount box does not require an entry, leave it blank.…

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