Titus spider toys was the manufacturer of spider toys and has huge market share with tremendous increase in its sales. In the recent times it was hard for the company to calculate its cash conversion cycle as the business grows, many receivables was not received on time. Advise the company with its cash cycle in days. Accounts receivables=172 Days Inventory Outstanding =15 Days Payable Outstanding=4 Average Sales per Day = 17

Titus spider toys was the manufacturer of spider toys and has huge market share with tremendous increase in its sales. In the recent times it was hard for the company to calculate its cash conversion cycle as the business grows, many receivables was not received on time. Advise the company with its cash cycle in days. Accounts receivables=172 Days Inventory Outstanding =15 Days Payable Outstanding=4 Average Sales per Day = 17

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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Vaughn Manufacturing is a growing company whose ability to raise capital has not been growing as quickly as its expanding assets and sales. Vaughn Manufacturing’s local banker has indicated that the company cannot increase its borrowing for the foreseeable future. Vaughn Manufacturing’s suppliers are demanding payment for goods acquired within 30 days of the invoice date, but Vaughn Manufacturing’s customers are slow in paying for their purchases (60–90 days). As a result, Vaughn Manufacturing has a cash flow problem.Vaughn Manufacturing needs $144,200 to cover next Friday’s payroll. Its balance of outstanding accounts receivable totals $838,100. To alleviate this cash crunch, the company sells $161,000 of its receivables.Record the entry that Vaughn Manufacturing would make. (Assume a 2% service charge.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) ACCOUNT TITLES AND EXPLANATION account title debit…