Practice 1. solve for the Efficiency of the Given Company aple Company Statement of Financial Position as of December 31, 2014 ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY Cash P 120,000.00 Accounts Payable P 70,000.00 Marketable Securities P 35,000.00 Short-term notes P 55,000.00 Accounts Receivable P 45,000.00 Current Liabilities P 125,000.00 Inventories P 130,000.00 Long-term debt P 2,700,000.00 Current Assets P 330,000.00 Total Liabilities P 2,825,000.00 Equipment P 2,970,000.00 Common stock P 500,000.00 Buildings P 1,600,000.00 Retained earnings P 1,575,000.00 Fixed Assets P 4,570,000.00 Stockholders' equity P 2,075,000.00 Total Assets P 4,900,000.00 Total liabilities and equity P 4,900,000.00 Sample Company Statement of Financial Performance for the Year Ended December 31, 2014 Sales Revenue P 2,000,000.00 Cost of Sales/Service P (1,300,000.00) Gross Margin P 700,000.00 Operating Expenes P (199,000.00) Operating Profit P 501,000.00 Other Income P 5,000.00 Other Expenses P (2,800.00) Net Income before Tax P 503,200.00 P (150,960.00) Income Tax P 352,240.00 Net Income after Tax
Practice 1. solve for the Efficiency of the Given Company aple Company Statement of Financial Position as of December 31, 2014 ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY Cash P 120,000.00 Accounts Payable P 70,000.00 Marketable Securities P 35,000.00 Short-term notes P 55,000.00 Accounts Receivable P 45,000.00 Current Liabilities P 125,000.00 Inventories P 130,000.00 Long-term debt P 2,700,000.00 Current Assets P 330,000.00 Total Liabilities P 2,825,000.00 Equipment P 2,970,000.00 Common stock P 500,000.00 Buildings P 1,600,000.00 Retained earnings P 1,575,000.00 Fixed Assets P 4,570,000.00 Stockholders' equity P 2,075,000.00 Total Assets P 4,900,000.00 Total liabilities and equity P 4,900,000.00 Sample Company Statement of Financial Performance for the Year Ended December 31, 2014 Sales Revenue P 2,000,000.00 Cost of Sales/Service P (1,300,000.00) Gross Margin P 700,000.00 Operating Expenes P (199,000.00) Operating Profit P 501,000.00 Other Income P 5,000.00 Other Expenses P (2,800.00) Net Income before Tax P 503,200.00 P (150,960.00) Income Tax P 352,240.00 Net Income after Tax
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Practice 1.
Solve for the Efficiency of the Given Company
Cample Company Statement of Financial Position as of December 31, 2014
ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
Cash
P 120,000.00
Accounts Payable
P 70,000.00
Marketable Securities
P 35,000.00
Short-term notes
P 55,000.00
Accounts Receivable
P 45,000.00
Current Liabilities
P 125,000.00
Inventories
P 130,000.00
Long-term debt
P 2,700,000.00
Current Assets
P 330,000.00
Total Liabilities
P 2,825,000.00
Equipment
P 2,970,000.00
Common stock
P 500,000.00
Buildings
P 1,600,000.00
Retained earnings
P 1,575,000.00
Fixed Assets
P 4,570,000.00
Stockholders' equity
P 2,075,000.00
Total Assets
P 4,900,000.00
Total liabilities and equity
P 4,900,000.00
Sample Company Statement of Financial Performance for the Year Ended December 31, 2014
Sales Revenue
P 2,000,000.00
Cost of Sales/Service
P (1,300,000.00)
Gross Margin
P 700,000.00
Operating Expenes
P (199,000.00)
Operating Profit
P 501,000.00
Other Income
P 5,000.00
Other Expenses
P (2,800.00)
Net Income before Tax
P 503,200.00
P (150,960.00)
Income Tax
P 352,240.00
Net Income after Tax](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4881c365-9352-47fc-b63a-daf5ae54d466%2Feb6b962c-0838-46bf-9df7-e61cb74abc76%2F7l7c70a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Practice 1.
Solve for the Efficiency of the Given Company
Cample Company Statement of Financial Position as of December 31, 2014
ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
Cash
P 120,000.00
Accounts Payable
P 70,000.00
Marketable Securities
P 35,000.00
Short-term notes
P 55,000.00
Accounts Receivable
P 45,000.00
Current Liabilities
P 125,000.00
Inventories
P 130,000.00
Long-term debt
P 2,700,000.00
Current Assets
P 330,000.00
Total Liabilities
P 2,825,000.00
Equipment
P 2,970,000.00
Common stock
P 500,000.00
Buildings
P 1,600,000.00
Retained earnings
P 1,575,000.00
Fixed Assets
P 4,570,000.00
Stockholders' equity
P 2,075,000.00
Total Assets
P 4,900,000.00
Total liabilities and equity
P 4,900,000.00
Sample Company Statement of Financial Performance for the Year Ended December 31, 2014
Sales Revenue
P 2,000,000.00
Cost of Sales/Service
P (1,300,000.00)
Gross Margin
P 700,000.00
Operating Expenes
P (199,000.00)
Operating Profit
P 501,000.00
Other Income
P 5,000.00
Other Expenses
P (2,800.00)
Net Income before Tax
P 503,200.00
P (150,960.00)
Income Tax
P 352,240.00
Net Income after Tax
![GIVEN FORMULAS:
Sales
Accounts receivable turnover =
Accounts Receivable
365
Average collection period =
Accounts Receivable Turnover
Cost of goods sold
Inventory turnover =
Inventory
365
Average age of inventory =
Inventory Turnover
Purchases
Accounts payable turnover =
Inventory
365
Average payment period =
Accounts Payable Turnover
Operating Cycle = Average Collection Period + Average Age of Inventory
Cash Conversion Cycle = Average collection period + Average age of inventory -Average age of payables
OR
Cash Conversion Cycle = Operating Cycle -Average Age of Payables
%3D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4881c365-9352-47fc-b63a-daf5ae54d466%2Feb6b962c-0838-46bf-9df7-e61cb74abc76%2Fz8xo7ng_processed.jpeg&w=3840&q=75)
Transcribed Image Text:GIVEN FORMULAS:
Sales
Accounts receivable turnover =
Accounts Receivable
365
Average collection period =
Accounts Receivable Turnover
Cost of goods sold
Inventory turnover =
Inventory
365
Average age of inventory =
Inventory Turnover
Purchases
Accounts payable turnover =
Inventory
365
Average payment period =
Accounts Payable Turnover
Operating Cycle = Average Collection Period + Average Age of Inventory
Cash Conversion Cycle = Average collection period + Average age of inventory -Average age of payables
OR
Cash Conversion Cycle = Operating Cycle -Average Age of Payables
%3D
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