EBK FINANCIAL MANAGEMENT: THEORY & PRAC
15th Edition
ISBN: 9781305886902
Author: EHRHARDT
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 5P
Summary Introduction
To determine: Average accounts payable for Company A.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A chain of appliance stores, APP Corporation, purchases inventory with a net price of $700,000 each day. The company purchases the inventory under the credit terms of 2/15, net 35. APP always takes the discount but takes the full 15 days to pay its bills. What is the average accounts payable for APP? Round your answer to the nearest dollar.
ABC Industries has accounts receivable of $700,
inventory of $1,200, sales of $4,200, and cost of goods
sold of $3,500. How long does it take ABC to both sell its
inventory and then collect the payment on the sale?
125 days
145 days
210 days
110 days
131 days
Company XYZ sold goods worth $5,000 on credit with a 2% discount if paid within 15 days. The customer paid the invoice after 20 days. What amount did the customer pay?
Chapter 16 Solutions
EBK FINANCIAL MANAGEMENT: THEORY & PRAC
Ch. 16 - Define each of the following terms:
Working...Ch. 16 - What are the two principal reasons for holding...Ch. 16 - Prob. 3QCh. 16 - Prob. 4QCh. 16 - Prob. 5QCh. 16 - Prob. 6QCh. 16 - Prob. 7QCh. 16 - Prob. 8QCh. 16 - What kinds of firms use commercial paper?
Ch. 16 - Prob. 1P
Ch. 16 - Medwig Corporation has a DSO of 17 days. The...Ch. 16 - What are the nominal and effective costs of trade...Ch. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Snider Industries sells on terms of 2/10, net 45....Ch. 16 - Prob. 7PCh. 16 - Prob. 8PCh. 16 - Grunewald Industries sells on terms of 2/10, net...Ch. 16 - The D.J. Masson Corporation needs to raise...Ch. 16 - Negus Enterprises has an inventory conversion...Ch. 16 - Prob. 12PCh. 16 - Dorothy Koehl recently leased space in the...Ch. 16 - Prob. 15PCh. 16 - Prob. 16PCh. 16 - The Raattama Corporation had sales of 3.5 million...Ch. 16 - Prob. 1MCCh. 16 - Prob. 2MCCh. 16 - Prob. 3MCCh. 16 - Is there any reason to think that RR may be...Ch. 16 - Prob. 5MCCh. 16 - Johnson knows that RR sells on the same credit...Ch. 16 - Prob. 7MCCh. 16 - Prob. 8MCCh. 16 - What is the impact of higher levels of accruals,...Ch. 16 - Assume that RR purchases $200,000 (net of...Ch. 16 - Prob. 11MCCh. 16 - Prob. 12MCCh. 16 - Prob. 13MCCh. 16 - Prob. 14MCCh. 16 - Prob. 15MCCh. 16 - In an attempt to better understand RR’s cash...
Knowledge Booster
Similar questions
- Kantorovich Company normally takes 25 days to pay for its average daily credit purchases of $1,900. It has average daily sales of $2,900, and collects accounts in 20 days. What is its net credit position? Multiple Choice O $10,500 O $11,500 ($12,500) O ($10,500)arrow_forwardFor questions 25-27, your answer will be add on bank side, subtract on bank side, 21. A company sells $23,980 of inventory to a customer on account. The terms are 2/10, n30. If the customer pays in 10 days, write the entry to record receipt of the payment.arrow_forwardUse the following transaction to answer the all of the questions. A company purchases inventory on credit for $80.000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 13% on sales and purchases. HST are remitted at the end of the month. What does the journal entry look like for the purchase of inventory using the periodic inventory system? Credit Purchases $30,000, Credit HST Payable $3,900, Credit, A/P the rest Debit Purchases $30,000, Debit HST Recoverable $3,900, Credit A/P the total of the 2 debits Credit Purchases $80,000, Credit HST Payable $10,400, Credit, A/P the rest Debit Purchases $80,000, Debit HST Recoverable $10,400, Credit, A/P the total of the 2 debitsarrow_forward
- How to do this, please explain. Thank you.arrow_forwardPlatinum Ltd buys their inventory from Metro. To encourage quick payments from their account receivables, Metro offers a 10% discount when payment is made within 2 days of purchases. On 13 May 2021, Platinum Ltd purchased inventory valued at N$15,000, paid via EFT on the same day. How would this transaction be recognized in the general journal of Platinum Ltd? Platinum Ltd uses a periodic inventory keeping system. a. Dr Purchases – N$ 15,000; Cr Bank – N$ 15,000 b. Dr Purchases – N$13,500; CR Accounts Payable – N$13,500 c. Dr Inventory – N$ 15,000; Cr Bank – N$ 15,000 d. Dr Purchases – N$ 13,500; Cr Bank – N$ 13,500 e. Dr Inventory – N$ 15,000; Cr Accounts Payable – N$ 15,000 f. Dr Inventory – N$13,500; Cr Bank – N$13,500arrow_forwardAssume that you start with a balance of $3600 on your credit card. During the first month, you charge $400, and during the second month, you charge $550. Assume that your credit card charges a 29% APR and that each month you make only the minimum payment of 2.5% of the balance. Complete the following table. (Round your answers to the nearest cent.) Finance Charge (+) Previous Purchases Payments (-) New Balance Balance (+) Month 1 Month 2arrow_forward
- On february 5, 2018, nicanor merchandising has purchased goods on account amounting to 500,000 with credit terms of 3/15, n/60 from its major trade supplier. nicanor operates 360 days a year. Required: 1. compute the nominal cost of trade credit 2. compute the effective cost of trade credit 3. assuming nicanor did not pay the account within the discount period, how much is the penalty in using the money for the next 45 days? 4. in case the prevailing interest rate on bank loan is 20% per annum at simple interest, should nicanor pay within the discount period or not? Breifly discuss your answer and present supporting computation. 5. determine the net monetary benefit that nicanor will enjoy in selecting the optimal alternative. please answer 3-5 thank youarrow_forwardDOLLAR BILL'S, a retail store in New York City, buys its inventory on credit. Upon purchase, it is given 30 days in which to pay its suppliers. It sells all of its merchandise on credit. It extends 60 days of credit to its customers. Its inventory turnover rate is 60 days.Situation 1Using the Cash Conversion Model, measure DOLLAR BILL'S financing cycle in both days and money ($US) using the following assumptions: Sales of $730,000 Gross Margin of 30% Financing Rate 6.5% Situation 2Recent management decisions have had the following impact: DOLLAR BILL has renegotiated its credit line so that it has 35 days to pay its suppliers It now extends 45 days of credit to its customers, It has an inventory turnover rate of 45 days. All other factors remain the same. Has DOLLAR BILL’S financing cycle improved or declined? Quantify the change in days and in dollars. Please show your work.arrow_forwardDOLLAR BILL'S, a retail store in New York City, buys its inventory on credit. Upon purchase, it is given 30 days in which to pay its suppliers. It sells all of its merchandise on credit. It extends 60 days of credit to its customers. Its inventory turnover rate is 60 days.Situation 1Using the Cash Conversion Model, measure DOLLAR BILL'S financing cycle in both days and money ($US) using the following assumptions: Sales of $730,000 Gross Margin of 30% Financing Rate 6.5%arrow_forward
- Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 5.5% service charge for sales on its credit card. Access deducts a 4.5% service charge for sales on its card. Mayfair completes the following transactions in June. June 4 Sold $700 of merchandise on credit (that had cost $350) to Natara Morris. 5 Sold $6,700 of merchandise (that had cost $3,350) to customers who used their Zisa cards. 6 Sold $5,656 of merchandise (that had cost $2,828) to customers who used their Access cards. 8 Sold $4,680 of merchandise (that had cost $2,340) to customers who used their Access cards. 13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $606 balance in McKee’s account stemmed from a credit sale in October of last year. 18 Received Morris’s check in full payment for the purchase of June 4. Required:Prepare journal…arrow_forwardZ-Mart uses the perpetual inventory system and has its own credit card. Z-Mart charges a per-month interest fee for any unpaid balance on its store credit card at each month-end. Apr. 30 -Mart sold merchandise for \$1,001 (that had cost $650) and accepted the customer'a -store credit card. May 31 -Mart recorded $4 of interest earned from its store credit card ap of this month-end.arrow_forwardMayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 5.5% service charge for sales on its credit card. Access deducts a 4.5% service charge for sales on its card. Mayfair completes the following transactions in June. June 4 Sold $600 of merchandise on credit (that had cost $240) to Natara Morris. 5 Sold $7,100 of merchandise (that had cost $2,840) to customers who used their Zisa cards. 6 Sold $6,152 of merchandise (that had cost $2,461) to customers who used their Access cards. 8 Sold $4,300 of merchandise (that had cost $1,720) to customers who used their Access cards. 13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $739 balance in McKee’s account stemmed from a credit sale in October of last year. 18 Received Morris’s check in full payment for the purchase of June 4. Required:Prepare journal…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning