Contemporary Financial Management
14th Edition
ISBN: 9781337090582
Author: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 2QTD
Summary Introduction
To discuss: The difference among cash conversion cycle and operating cycle for a normal manufacturing corporation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Describe the cash flow cycle in a typical manufacturing firm?
How can we determine the Cash flows associated with producing products?
The Pet Store experienced the following events for the Year 1 accounting period:
1. Acquired $55,000 cash from the issue of common stock.
2. Purchased $78,000 of inventory on account.
3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,400 paid in cash.
4. Sold inventory on account that cost $44,000 for $83,000.
5. Freight cost on the goods sold in Event 4 was $1,200. The goods were shipped FOB destination. Cash was paid for the freight cost.
6. Customer in Event 4 returned $5,360 worth of goods that had a cost of $2,730.
7. Collected $68,060 cash from accounts receifable.
8. Paid $64,000 cash on accounts payable.
9. Paid $3,360 for advertising expense.
10. Paid $3,570 cash for insurance expense.
Required
a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction
NA.
Transaction
Cost
Chapter 16 Solutions
Contemporary Financial Management
Ch. 16 - Prob. 1QTDCh. 16 - Prob. 2QTDCh. 16 - Prob. 3QTDCh. 16 - Prob. 4QTDCh. 16 - Prob. 5QTDCh. 16 - Prob. 6QTDCh. 16 - Prob. 7QTDCh. 16 - Prob. 8QTDCh. 16 - Prob. 9QTDCh. 16 - Prob. 10QTD
Ch. 16 - Prob. 11QTDCh. 16 - Prob. 12QTDCh. 16 - Prob. 13QTDCh. 16 - Prob. 14QTDCh. 16 - Prob. 15QTDCh. 16 - Prob. 16QTDCh. 16 - Prob. 17QTDCh. 16 - Prob. 18QTDCh. 16 - Prob. 19QTDCh. 16 - Prob. 20QTDCh. 16 - Prob. 21QTDCh. 16 - Prob. 22QTDCh. 16 - Prob. 23QTDCh. 16 - Prob. 24QTDCh. 16 - Prob. 1PCh. 16 - Prob. 2PCh. 16 - Prob. 3PCh. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Prob. 6PCh. 16 - Prob. 7PCh. 16 - Prob. 8PCh. 16 - Prob. 9PCh. 16 - Prob. 10PCh. 16 - Prob. 11PCh. 16 - Prob. 12PCh. 16 - Prob. 13PCh. 16 - Prob. 14PCh. 16 - Prob. 15PCh. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Prob. 18PCh. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21PCh. 16 - Prob. 22PCh. 16 - Prob. 23PCh. 16 - Prob. 24PCh. 16 - Prob. 25PCh. 16 - Prob. 26PCh. 16 - Prob. 27PCh. 16 - Prob. 28PCh. 16 - Prob. 29PCh. 16 - Prob. 30PCh. 16 - Prob. 31PCh. 16 - Prob. 32PCh. 16 - Prob. 33PCh. 16 - Prob. 34P
Knowledge Booster
Similar questions
- Given the following information, convert Cardinal Companys cost of goods sold from its income statement into payments to suppliers for its statement of cash flows.arrow_forwardThe event which leads to creation of Accounts payable in Cash conversion cycle of a manufacturing firm is: a. Procurement of raw materials on credit b. Finished products sold on credit c. None of these d. Labour converts material into finished goodsarrow_forwardThe largest expense of most manufacturing firms is?a. Salaries Expenseb. Amortization Expensec. Rent Expensed. Cost of Goods Soldarrow_forward
- Working capital required for the business is equal to Operating Expenses Raw Material and Finished Goods Stock Raw Material, WIP, Finished Goods, Receivables less payables Receivablesarrow_forwardHow can factoring help a company manage itscash flow?arrow_forwardWhat are the Cost Product Cost and External Financial reporting?arrow_forward
- The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed a. cost-volume-profit analysis b. contribution margin analysis c. budgetary analysis d. gross profit analysis In a profit center, the manager has responsibility and authority for making decisions that affect a. assets b. investments c. long-term liabilities d. costsarrow_forwardDefine the following terms: inventory conversion period, average collection period,and payables deferral period. Explain how these terms are used to form the cashconversion cycle.arrow_forwardWhen trying to identify product and period costs, is cash, work inprocess, and raw materials inventory considered to be period or product costs?arrow_forward
- In the expenditure cycle documents, who is responsible for custodial function of the company and the processing of payments to suppliers?arrow_forward41) Which two items will normally appear at some point in time on the Income Statement but NOT in Cash Distributions ? Raw Material Purchases and Indirect Labor O Direct Labor and Manufacturing Overhead Factory Maintenance costs and Factory Rent O Depreciation and Bad Debt Expensearrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College