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You have collected the following information for the Charger Co.: Item Beginning Ending Inventory $5,000 $7,000 Accts. Receivable 1,600 2,400 Accts. Payable 2,700 4,800 Credit sales for the year just ended were $50,000, and the cost of goods sold was $30,000. a. How long does it take for Charger to collect on its receivables? b. How long does merchandise stay around before it is sold? c. How long does it take Charger to pay its bills? d. What is Charger's operating cycle?

You have collected the following information for the Charger Co.: Item Beginning Ending Inventory $5,000 $7,000 Accts. Receivable 1,600 2,400 Accts. Payable 2,700 4,800 Credit sales for the year just ended were $50,000, and the cost of goods sold was $30,000. a. How long does it take for Charger to collect on its receivables? b. How long does merchandise stay around before it is sold? c. How long does it take Charger to pay its bills? d. What is Charger's operating cycle?

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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You have collected the following information for the Charger Co.: Item Beginning Ending Inventory $5,000 $7,000 Accts. Receivable 1,600 2,400 Accts. Payable 2,700 4,800 Credit sales for the year just ended were $50,000, and the cost of goods sold was $30,000. a. How long does it take for Charger to collect on its receivables? b. How long does merchandise stay around before it is sold? c. How long does it take Charger to pay its bills? d. What is Charger's operating cycle?
Transcribed Image Text:You have collected the following information for the Charger Co.: Item Beginning Ending Inventory $5,000 $7,000 Accts. Receivable 1,600 2,400 Accts. Payable 2,700 4,800 Credit sales for the year just ended were $50,000, and the cost of goods sold was $30,000. a. How long does it take for Charger to collect on its receivables? b. How long does merchandise stay around before it is sold? c. How long does it take Charger to pay its bills? d. What is Charger's operating cycle?
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