Mr. Omar is a Financial Manager of an Omani industrial company located in Muscat that has another three different branches in the Omani Market. The head company besides other branches are dealing with many suppliers and many customers on a daily bases; Mr. Omar wants to evaluate the working capital in all branches for the year 2020 in order to improve the operating performance of the company and make suitable and needed decisions based on results as well as he will need some calculations with regard to the cash conversion cycle of each branch and evaluate different elements in the operating cycle so that will enable him to manage the working capital properly and improve the over whole performance in future. The Financial statements of the head company in Muscat shows a Net Sales of OMR 3,305,000, Beginning Inventory of OMR 400,000, Ending Inventory OMR 220,000, Average A/R are OMR 410,000, Average A/P are OMR 320,000, the costs of goods sold equals to OMR 1,900,000 and Net purchases are 70% of costs of goods sold. you are working in the financial department of the company and you have been assigned and two of your colleagues to assist the financial manager with regard of all needed data and information from other different departments such as warehouse, production and sales of all branches that are located in Salalah, Nizwa, Sohar to smooth and accelerate the process of managing the working capital; the following will be some issues you need to solve so you can provide accurate report to the financial manager: Question text The financial manager wants to shorten Sohar branch number of days of payables from 90 days to 75 days and the average accounts payable is OMR 100,000. What will be the net purchases? OMR 400,000 b. OMR 40,000 OMR 405,556 d. OMR 486,667
Mr. Omar is a Financial Manager of an Omani industrial company located in Muscat that has another three different branches in the Omani Market. The head company besides other branches are dealing with many suppliers and many customers on a daily bases; Mr. Omar wants to evaluate the working capital in all branches for the year 2020 in order to improve the operating performance of the company and make suitable and needed decisions based on results as well as he will need some calculations with regard to the cash conversion cycle of each branch and evaluate different elements in the operating cycle so that will enable him to manage the working capital properly and improve the over whole performance in future. The Financial statements of the head company in Muscat shows a Net Sales of OMR 3,305,000, Beginning Inventory of OMR 400,000, Ending Inventory OMR 220,000, Average A/R are OMR 410,000, Average A/P are OMR 320,000, the costs of goods sold equals to OMR 1,900,000 and Net purchases are 70% of costs of goods sold. you are working in the financial department of the company and you have been assigned and two of your colleagues to assist the financial manager with regard of all needed data and information from other different departments such as warehouse, production and sales of all branches that are located in Salalah, Nizwa, Sohar to smooth and accelerate the process of managing the working capital; the following will be some issues you need to solve so you can provide accurate report to the financial manager: Question text The financial manager wants to shorten Sohar branch number of days of payables from 90 days to 75 days and the average accounts payable is OMR 100,000. What will be the net purchases? OMR 400,000 b. OMR 40,000 OMR 405,556 d. OMR 486,667
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:Mr. Omar is a Financial Manager of an Omani industrial company located in Muscat that has another three
different branches in the Omani Market. The head company besides other branches are dealing with many
suppliers and many customers on a daily bases; Mr. Omar wants to evaluate the working capital in all
branches for the year 2020 in order to improve the operating performance of the company and make
suitable and needed decisions based on results as well as he will need some calculations with regard to the
cash conversion cycle of each branch and evaluate different elements in the operating cycle so that will
enable him to manage the working capital properly and improve the over whole performance in future.
The Financial statements of the head company in Muscat shows a Net Sales of OMR 3,305,000, Beginning
Inventory of OMR 400,000, Ending Inventory OMR 220,000, Average A/R are OMR 410,000, Average A/P
are OMR 320,000, the costs of goods sold equals to OMR 1,900,000 and Net purchases are 70% of costs
of goods sold.
you are working in the financial department of the company and you have been assigned and two of your
colleagues to assist the financial manager with regard of all needed data and information from other
different departments such as warehouse, production and sales of all branches that are located in Salalah,
Nizwa, Sohar to smooth and accelerate the process of managing the working capital; the following will be
some issues you need to solve so you can provide accurate report to the financial manager:
Question text
The financial manager wants to shorten Sohar branch number of days of payables from 90 days to 75 days
and the average accounts payable is OMR 100,000. What will be the net purchases?
a.
OMR 400,000
b.
OMR 40,000
C.
OMR 405,556
d.
OMR 486,667
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education