TB 03-58 The Fastbank Motorcycle Company (FMC) receiv..The Fastbank Motorcycle Company (FMC) receives a $10 million order from dealers wanting to buy its most popular model on credit. No money changes hands. Duebalance sheet?excess demand, FMC cannot supply the motorcycles until next quarter. How will these events affect theMultiple ChoiceBoth Accounts Receivable and Shareholders' Equity will increase by $10 million this quarter.Accounts Receivable will increase by $10 million this quarter and Inventories will decrease next quarter.Both Accounts Receivable and Accounts Payable will increase by $10 million this quarter.These events will not impact the balance sheet this quarter.

As per the principle of accounting, we should record only those transactions which can be…

The Fastbank Motorcycle Company (FMC) receives a $10 million order from dealers wanting to buy its most popular model on credit. No money changes hands. Due to excess demand, FMC cannot supply the motorcycles until next quarter. How will these events affect the balance sheet? Multiple Choice Both Accounts Receivable and Shareholders' Equity will increase by $10 million this quarter. Accounts Receivable will increase by $10 million this quarter and Inventories will decrease next quarter. Both Accounts Receivable and Accounts Payable will increase by $10 million this quarter. These events will not impact the balance sheet this quarter.

The Fastbank Motorcycle Company (FMC) receives a $10 million order from dealers wanting to buy its most popular model on credit. No money changes hands. Due to excess demand, FMC cannot supply the motorcycles until next quarter. How will these events affect the balance sheet? Multiple Choice Both Accounts Receivable and Shareholders' Equity will increase by $10 million this quarter. Accounts Receivable will increase by $10 million this quarter and Inventories will decrease next quarter. Both Accounts Receivable and Accounts Payable will increase by $10 million this quarter. These events will not impact the balance sheet this quarter.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Fizzy Animators, Inc. currently makes all sales on credit and offers no cash discount. The firm is considering a 2 percent cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are currently $1,000,000, variable cost is $600,000 (note the variable cost % is 60%). The firm expects that the change in credit terms will result in an increase in sales to $1,500,000 per year and variable costs will increase to $900,000 per year. Fizzy projects that 80 percent of the sales will take the discount, and the average collection period will drop to 30 days. The firm's required return on equal-risk investments is 10 percent. (Assume a 360-day year.) What is the cost (benefit) of the marginal cash discount? O ($18,000) O $24,000 ($22,000) O $30,000
Please help me with this question thankuuuuu please
Please answer fast I give you upvote
ABC Distributing Company sells small appliances to hardware stores. The President of the Company thinking about changing the credit policies offered by the firm to attract customers away from competitors. The current policy calls for a 1/10, net 30, and the new policy would call for a 3/10, net 50. Currently 40% of the customers are taking the discount, and it is anticipated that this number would go up to 50% with the new discount policy. It is further anticipated that annual sales would increase from a level of $200,000 to $250,000 because of the change in the cash discount policy. The increased sales would also affect the inventory level. The average inventory carried by Company is based on a determination of an EOQ. Assume unit sales of small appliances will increase from 20,000 to 25,000 unit. The ordering cost for each is $100 and the carrying cost is based on EOQ/2. Each unit in inventory has an average cost of $6.50. CoGS is equal to 65% of net sales; general and adm. expenses…
Give answer of this Question please
The Mitchem Marble company has a target current ratio of 2.2 but has experienced some difficulties financing its expanding sales in the past few months. At present the firm has a current ratio of 2.9 and current assests of $2.62 million. If Mitchem expands its receivables and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached? The additional amount of receivables and inventories (short term debt) is how many million? (rounded to two decimal places)
Gerard Appliances, Inc., is a small manufacturer of washing machines and dryers. It sells its products to large, established discount retailers that market the appliances under their own names. Gerard generally sells the appliances on trade credit terms of n/60, but if a customer wants a longer term, it will accept a note with a term of up to nine months. At present, the company is having cash flow troubles and needs $10 million immediately. Its Cash balance is $400,000, its Accounts Receivable balance is $4.6 million, and its Notes Receivable balance is $7.4 million. (a) How might Gerard Appliances use its accounts receivable and notes receivable to raise the cash it needs? (b) What are its prospects for raising the needed cash?
Need help with answerss! will upvote
McGriff Dog Food Company normally takes 30 days to pay for average daily credit purchases of $9,730. Its average daily sales are $10,010, and it collects accounts in 32 days. a. What is its net credit position? Net credit position b-1. If the firm extends its average payment period from 30 days to 37 days (and all else remains the same), what is the firm's new net credit position? (Negative amount should be indicated by a minus sign.) Net credit position b-2. Has the firm improved its cash flow? Yes No
ABC has a major supplier that offers a credit term of 2/15, n/45. Cash not yet used for payments are generally kept in an account that earns ABC 2.5% per year. Use 360 days in a year. Compute for the following: 1. Simple annual effective cost of paying on 45th day instead of the 15th day. 2. Compounded annual effective cost of paying on 45th day instead of the 15th day. Please create a detailed solution for the two questions. Thank you
Your company received a $7 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $2 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $5 million within 40 days. Suppose your firm's tax rate is 0% (ignore taxes). Based on this information, complete the table below: Value of Account Increase/Decrease/ No effect effect ($) Revenues Earnings Receivables Inventory Cash