8. Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annualcredit sales are P300 million and its accounts average 25 days overdue. Determine Sasakkyani'saverage collection period. Assume 360 days in a year.a. 30 daysb. 45 daysc. 50 daysanswer not given9. Browny sells to retail appliance stores on credit terms of net 30. Annual credit sales isP27.000,000 spread evenly throughout the year and its accounts average 20 days overdue.The firm's variable cost ratio is 0.70. Determine Browny's average investment in receivables.Assume 360 days in a year.a. P1,500,000b. P2,250,000c. P 3,750,000d. cannot be determined from the information provided10. Marca Leon is planning to change its credit policy. The proposed change is expected toshorten the collection period from 50 days to 30 days,increase the ratio of cash sales to total sales from 20% to 30%, andirallosdecrease total sales by 10%.If projected sales for the coming year is P40,000,000, what is the difference on the averageaccounts receivable between the current and the proposed change in credit policy? Assume360 days in a year.a. P2,344,444b. P2,604,939c. P4,938,272d. cannot be determined

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Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annual credit sales are P300 million and its accounts average 25 days overdue. Determine Sasakyani's average collection period. Assume 360 days in a year. a. 30 days b. 45 days c. 50 days d. answer not given

Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annual credit sales are P300 million and its accounts average 25 days overdue. Determine Sasakyani's average collection period. Assume 360 days in a year. a. 30 days b. 45 days c. 50 days d. answer not given

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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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

8. Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annual
credit sales are P300 million and its accounts average 25 days overdue. Determine Sasakkyani's
average collection period. Assume 360 days in a year.
a. 30 days
b. 45 days
c. 50 days
answer not given
9. Browny sells to retail appliance stores on credit terms of net 30. Annual credit sales is
P27.000,000 spread evenly throughout the year and its accounts average 20 days overdue.
The firm's variable cost ratio is 0.70. Determine Browny's average investment in receivables.
Assume 360 days in a year.
a. P1,500,000
b. P2,250,000
c. P 3,750,000
d. cannot be determined from the information provided
10. Marca Leon is planning to change its credit policy. The proposed change is expected to
shorten the collection period from 50 days to 30 days,
increase the ratio of cash sales to total sales from 20% to 30%, and
irallos
decrease total sales by 10%.
If projected sales for the coming year is P40,000,000, what is the difference on the average
accounts receivable between the current and the proposed change in credit policy? Assume
360 days in a year.
a. P2,344,444
b. P2,604,939
c. P4,938,272
d. cannot be determined

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