UPENN: LOOSE LEAF CORP.FIN W/CONNECT
17th Edition
ISBN: 9781260361278
Author: Ross
Publisher: McGraw-Hill Publishing Co.
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Chapter 26, Problem 3QP
Changes in the Operating Cycle Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change.
- a. Receivables average goes up.
- b. Credit repayment times for customers are increased.
- c. Inventory turnover goes from 3 times to 6 times.
- d. Payables turnover goes from 6 times to 11 times.
- e. Receivables turnover goes from 7 times to 9 times.
- f. Payments to suppliers are accelerated.
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Students have asked these similar questions
What relationship exists between the average collection period and accounts receivable turnover?
Select one:
a. There is a direct and proportional relationship.
b. Both ratios are expressed in number of days.
c. As average collection period increases (decreases) the accounts receivable turnover decreases (increases).
d. Both ratios are expressed in number of times receivables are collected per year.
6. Accounts receivable turnover is 8. What is the average collection period assuming annual data
are used?
What is the average collection period if quarterly data are used?
7. Sales for the year amount to P3,000,000, Accounts receivable is P360,000. What is the average
collection period assuming annual data is used?
quarterly data is used?
8. Beginning inventory is P40,000, ending inventory is P28,000. Cost of goods sold is double the
ending inventory and accounts payable is P44,000,. What is the accounts payable turnover?
9. The quick ratio is 1.75 while the current ratio is 2.5. the current liabilities amount to P525,000. Cost
of goods sold is P955,000. What is the inventory turnover?
of inventory?
what is the average age
10. Ending inventory is P33,000 while accounts payable is P5,000. Purchases were half the ending
inventory. What is the accounts payable turnover?
inventory?
What is the average age of
Accounts receivable turnover is 4. What is the average collection period assuming annual data are used? What is the average collection period assuming quarterly data are used?
Chapter 26 Solutions
UPENN: LOOSE LEAF CORP.FIN W/CONNECT
Ch. 26 - Prob. 1CQCh. 26 - Prob. 2CQCh. 26 - Prob. 3CQCh. 26 - Cost of Current Assets Grohl Manufacturing, Inc.,...Ch. 26 - Prob. 5CQCh. 26 - Shortage Costs What are the costs of shortages?...Ch. 26 - Prob. 7CQCh. 26 - Prob. 8CQCh. 26 - Prob. 9CQCh. 26 - Prob. 10CQ
Ch. 26 - Prob. 11CQCh. 26 - Prob. 12CQCh. 26 - Prob. 1QPCh. 26 - Cash Equation Blizzard Corp. has a book value of...Ch. 26 - Changes in the Operating Cycle Indicate the effect...Ch. 26 - Prob. 4QPCh. 26 - Calculating Cash Collections The Litzenberger...Ch. 26 - Prob. 6QPCh. 26 - Prob. 7QPCh. 26 - Calculating Payments The Thakor Corporations...Ch. 26 - Calculating Cash Collections The following is the...Ch. 26 - Prob. 10QPCh. 26 - Prob. 11QPCh. 26 - Prob. 12QPCh. 26 - Prob. 13QPCh. 26 - Prob. 14QPCh. 26 - Prob. 15QPCh. 26 - Prob. 1MCCh. 26 - Rework the cash budget and short-term financial...Ch. 26 - Rework the sales budget assuming an 11 percent...
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- the best sentence reflect the decrease in trade receivables balance at the end of the year : إختر أحد الخيارات: a. decrease the current ratio b. decrease the quick ratio. c. increase the current ratio and quick ratio d. decrease the current ratio and quick ratio.arrow_forwardDays' sales in receivables a.measures the number of times the receivables turn over each year b.is an estimate of the length of time the receivables have been outstanding c.is credit sales divided by average receivables d.is not meaningful and therefore is not usedarrow_forwardA. Assume that all sales are on account. If sales revenue was $18,000,000 and the average days in accounts receivable was 38 days for the last operating year, what would the average accounts receivable balance have been? a. $1,680,000 b. $1,500,000 c. $1,875,000 d. $18,000,000 B. If accounts receivable is projected to be $800,000 at the beginning of the next operating year and $1,100,000 at the end of the next operating year: would cash be generated by accounts receivable or needed to fund accounts receivable? And, by how much? a. $300,000 of cash needed to fund accounts receivable b. $1,100,000 of cash needed to fund accounts receivable c. $500,000 of cash needed to fund accounts receivable d. $300,000 of cash generated by accounts receivablearrow_forward
- If the accounts receivable turnover is 42 days, what is the account receivable turnover ratio? * a. 7.14 times b. 8.69 times c. None of the choices d. 4.52 timesarrow_forwardComparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company's common stock at the end of the year was $30. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses $ 1,090 9,200 12,500 740 $ 1,320 7,500 11,800 540 Total current assets 23,530 21,160 Property and equipment: Land 9,200 44,083 9,200 39,201 Buildings and equipment, net Total property and equipment 53,283 48,401 Total assets $76,813 $69,561 Liabilities and Stockholders' Equity Current…arrow_forwardA company reports the following: Sales Average accounts receivable (net) Determine (a) the accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to one decimal place. Assume a 365- day year. a. Accounts receivable turnover $398,580 76,650 b. Number of days' sales in receivables daysarrow_forward
- To increase its sales, a company decides to increase its credit terms from 15 to 30 days. What effect will this change in policy have on receivables turnover and days' sales uncollected?arrow_forwardWhich of the following is NOT a correct explanation for turnover ratios and periods calculated based on them? Select one: a. Receivables turnover indicates how many times a company circulates its receivables in a year. b. Average collection period is the number of days between the sale transaction and the collection of receivable from customer. c. Inventory turnover is the number of days between purchase of inventory and its sale to the customer. d. Average payment period is the number of days between the purchase transaction and the payment of payables to the suppliers. Clear my choicearrow_forwardcalculate these (d) Current ratio :1 (e) Accounts receivable turnover times (f) Average collection period daysarrow_forward
- What is accounts payable turnover?a. Purchases on account divided by average accounts payableb. A measure of liquidityc. A measure of the number of times a year a company is able to pay its accounts payabled. All of the listed answers are correct.arrow_forwarda) Calculate Kopitiam Sdn Bud’s accounts receivable turnover ratio for Year 2 and Year 3. b) Calculate the number of days the average balance of receivables is outstanding before being converted into cash (turnover in days) for Year 2 and Year 3 c) What problem do you see with the company’s credit policy if the terms are net 30 days? Explain your answer.arrow_forwardWhich ratio measures the number of times the receivables are rotated in a year in terms of sales? [A] stock turnover ratio [B] debtors turnover ratio [C] creditors velocity ratio [D] working capital turnover ratioarrow_forward
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