May I ask for a solution and explanation to the problem for a better understanding. Thank you!19. What is the average sales period for Bittergourd? a. 24 daysb. 25 daysc. 26 daysd. 27 days BITTERGOURD CompanyIncome StatementFor the Year Ended December 31, 2014(in thousands of pesos)P 2,000(1,400)P 600(240)Р 360(50)P 310(93)P 217Sales (all on account).Cost of goods sold..Gross margin..Operating expenses..Net operating income..Interest expense.Net income before taxes.Income taxes (30%)..Net income.BITTERGOURD CompanyStatement of Financial PositionDecember 31, 2014 and 2013(in thousands of pesos)Assets20142013Current assets:Р 140Р 130Cash and Cash equivalents..Accounts receivable, net.120110110Inventory..Prepaid expenses.1005040Total current assets.P 410P 390Noncurrent assets:Plant & equipment, net.1,8401,830Total assets..P2,250P2,220Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable.P 100P 100Accrued liabilities.Notes payable, short term.8080210P 390230Total current liabilities..P 410Noncurrent liabilities:Bonds payable .460500Total liabilities .P 850P 910Shareholders' equity:Preference share capital,P5 par, 5%.Ordinary share capital, P10 parShare premium - ordinary..Accumulated profits.Total shareholders' equity..Total liabilities & shareholders' equity.Р 100P 100200200260260840750P1,400P2,250P1,310P2,220Dividends during 2014 totaled P127,000, of which P5,000 were preference dividends. The market price of anordinary share on December 31, 2014 was P140.

Given: Opening inventory =110Closing inventory =100Cost of goods sold =1400

Answered: What is the average sales period for…

Business

Accounting

What is the average sales period for Bittergourd? a. 24 days b. 25 days c. 26 days d. 27 days

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

May I ask for a solution and explanation to the problem for a better understanding. Thank you!

19. What is the average sales period for Bittergourd?

a. 24 days

b. 25 days

c. 26 days

d. 27 days

BITTERGOURD Company
Income Statement
For the Year Ended December 31, 2014
(in thousands of pesos)
P 2,000
(1,400)
P 600
(240)
Р 360
(50)
P 310
(93)
P 217
Sales (all on account).
Cost of goods sold..
Gross margin..
Operating expenses..
Net operating income..
Interest expense.
Net income before taxes.
Income taxes (30%)..
Net income.
BITTERGOURD Company
Statement of Financial Position
December 31, 2014 and 2013
(in thousands of pesos)
Assets
2014
2013
Current assets:
Р 140
Р 130
Cash and Cash equivalents..
Accounts receivable, net.
120
110
110
Inventory..
Prepaid expenses.
100
50
40
Total current assets.
P 410
P 390
Noncurrent assets:
Plant & equipment, net.
1,840
1,830
Total assets..
P2,250
P2,220
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable.
P 100
P 100
Accrued liabilities.
Notes payable, short term.
80
80
210
P 390
230
Total current liabilities..
P 410
Noncurrent liabilities:
Bonds payable .
460
500
Total liabilities .
P 850
P 910
Shareholders' equity:
Preference share capital,P5 par, 5%.
Ordinary share capital, P10 par
Share premium - ordinary..
Accumulated profits.
Total shareholders' equity..
Total liabilities & shareholders' equity.
Р 100
P 100
200
200
260
260
840
750
P1,400
P2,250
P1,310
P2,220
Dividends during 2014 totaled P127,000, of which P5,000 were preference dividends. The market price of an
ordinary share on December 31, 2014 was P140.

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