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The trading account of Calypso Ltd for the year ended 30 June 2005 is set out below: £ £ 430,000 Sales Opening stock 50,000 Purchases 312,500 362,500 Closing stock 38,000 Cost of sales 324,500 Gross profit 105,500 The following amounts have been extracted from the company’s balance sheet at 30 June 2005. £ Trade debtors 60,000 Prepayments 4,000 Cash in hand 6,000 Bank overdraft 8,000 Trade creditors 40,000 Accruals 3,000 Proposed dividends 5,000 In the questions that follow assume a year to be 365 days and ignore VAT.     Calculate the length of Calypso Ltd’s cash cycle in days. A 2 days B 4 days C 53 days D 100 days

The trading account of Calypso Ltd for the year ended 30 June 2005 is set out below: £ £ 430,000 Sales Opening stock 50,000 Purchases 312,500 362,500 Closing stock 38,000 Cost of sales 324,500 Gross profit 105,500 The following amounts have been extracted from the company’s balance sheet at 30 June 2005. £ Trade debtors 60,000 Prepayments 4,000 Cash in hand 6,000 Bank overdraft 8,000 Trade creditors 40,000 Accruals 3,000 Proposed dividends 5,000 In the questions that follow assume a year to be 365 days and ignore VAT.     Calculate the length of Calypso Ltd’s cash cycle in days. A 2 days B 4 days C 53 days D 100 days

FINANCIAL ACCOUNTING
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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The trading account of Calypso Ltd for the year ended 30 June 2005 is set out below:

£ £

430,000

Sales

Opening stock 50,000

Purchases 312,500

362,500

Closing stock 38,000

Cost of sales 324,500

Gross profit 105,500

The following amounts have been extracted from the company’s balance sheet at

30 June 2005.

£

Trade debtors 60,000

Prepayments 4,000

Cash in hand 6,000

Bank overdraft 8,000

Trade creditors 40,000

Accruals 3,000

Proposed dividends 5,000

In the questions that follow assume a year to be 365 days and ignore VAT.

 

 

Calculate the length of Calypso Ltd’s cash cycle in days.

A 2 days

B 4 days

C 53 days

D 100 days

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