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Exercise 4-54 Operating Cycle and Current Receivables a. Dither and Sly are attorneys-at-law who specialize in federal income tax law. The): complete their typical case in 6 months or less and collect from the typical client within 1 additional month. b. Johnston’s Market specializes in fresh meat and fish. All merchandise must be sold within one week of purchase. Almost all sales are for cash and any receivables are generally paid by the end of the following month. c. Mortondo’s is a women’s clothing store specializing in high-style merchandise. Merchandise spends an average of 7 months on the rack following purchase. Most sales are on credit and the typical customer pays within 1 month of sale. d. Trees Inc. grows Christmas trees and sells them to various Christmas tree lots. Most sales are for cash. It takes 6 years to grow a tree. Required: For each of the businesses described above, indicate the length of the operating cycle.

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

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Chapter
Section
Chapter 4, Problem 54E
Textbook Problem

Exercise 4-54 Operating Cycle and Current Receivables

a. Dither and Sly are attorneys-at-law who specialize in federal income tax law. The): complete their typical case in 6 months or less and collect from the typical client within 1 additional month.

b. Johnston’s Market specializes in fresh meat and fish. All merchandise must be sold within one week of purchase. Almost all sales are for cash and any receivables are generally paid by the end of the following month.

c. Mortondo’s is a women’s clothing store specializing in high-style merchandise. Merchandise spends an average of 7 months on the rack following purchase. Most sales are on credit and the typical customer pays within 1 month of sale.

d. Trees Inc. grows Christmas trees and sells them to various Christmas tree lots. Most sales are for cash. It takes 6 years to grow a tree.

Required:

For each of the businesses described above, indicate the length of the operating cycle.

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Chapter 4 Solutions

Cornerstones of Financial Accounting
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Ch. 4 - Why does a company give particular attention to...Ch. 4 - Why is it important to segregate the duties for...Ch. 4 - Describe two advantages of performing...Ch. 4 - Describe the potential sources of difference...Ch. 4 - What kinds of bank reconciliation items require...Ch. 4 - Describe how cash over and short can be used for...Ch. 4 - Why do most companies have petty cash funds?Ch. 4 - What are cash equivalents?Ch. 4 - Why do companies invest their cash in short-term...Ch. 4 - What is the operating cycle?Ch. 4 - Describe the basic cash management principles.Ch. 4 - Why do companies hold short-term investments?Ch. 4 - What is the primary role of internal controls in...Ch. 4 - Which of the following is not one of the three...Ch. 4 - Which of the following is not one of the five...Ch. 4 - Which of the following is not one of the five...Ch. 4 - The internal audit function is part of what...Ch. 4 - Which of the following is not generally an...Ch. 4 - Allowing only certain employees to order goods and...Ch. 4 - Deposits made by a company but not yet reflected...Ch. 4 - Which one of the following would not appear on a...Ch. 4 - Which one of the following is not a cash...Ch. 4 - The operating cycle is best described as the time...Ch. 4 - High level cash management strategies include bank...Ch. 4 - Effective cash management and control includes all...Ch. 4 - Cash management principles do not include earning...Ch. 4 - Which one of the following statements is true?...Ch. 4 - Cornerstone Exercise 4-16 Bank Reconciliation...Ch. 4 - Cornerstone Exercise 4-17 Bank Reconciliation The...Ch. 4 - Cornerstone Exercise 4-18 Adjusting Entry from...Ch. 4 - Cornerstone Exercise 4-19 Adjusting Entry from...Ch. 4 - Cornerstone Exercise 4-20 Bank Reconciliation Tiny...Ch. 4 - Cornerstone Exercise 4-21 Cash Over and Short On a...Ch. 4 - Cornerstone Exercise 4-22 Cash Over and Short...Ch. 4 - Cornerstone Exercise 4-23 Petty Cash Fund Murphy...Ch. 4 - Cornerstone Exercise 4-24 Petty Cash with Change...Ch. 4 - Brief Exercise 4-25 Role of Internal Control...Ch. 4 - Brief Exercise 4-26 Components of Internal Control...Ch. 4 - Brief Exercise 4-27 Bank Reconciliation Hula Corp....Ch. 4 - Brief Exercise 4-28 Adjusting Entry from Bank...Ch. 4 - Brief Exercise 4-29 Adjusting Entry from Bank...Ch. 4 - Brief Exercise 4-30 Bank Reconciliation Garrison...Ch. 4 - Brief Exercise 4-31 Bank Reconciliation Zing Corp....Ch. 4 - Brief Exercise 4-32 Cash Over and Short At the end...Ch. 4 - Brief Exercise 4-33 Cash Over and Short Milner...Ch. 4 - Brief Exercise 4-34 Petty Cash Fund Kingery Inc....Ch. 4 - Brief Exercise 4-35 Petty Cash With Change in Fund...Ch. 4 - Brief Exercise 4-36 Cash Reporting Richter...Ch. 4 - Brief Exercise 4-37 Operating Cycle Businesses...Ch. 4 - Brief Exercise 4-38 Cash Management Effective cash...Ch. 4 - Exercise 4-39 Internal Control System Required: A...Ch. 4 - Exercise 4-40 Internal Control Terminology...Ch. 4 - Exercise 4-41 Classifying Internal Control...Ch. 4 - Hannah Thacher, a longtime employee of a local...Ch. 4 - Miller Enterprises deposits the cash received...Ch. 4 - Exercise 4-44 Bank Reconciliation OBJECTIVE a...Ch. 4 - Exercise 4-45 Bank Reconciliation (Partial)...Ch. 4 - OBJECTIVE 9 Exercise 4-46 Bank Reconciliation...Ch. 4 - OBJECTIVE 0 Exercise 4-47 Bank Reconciliation @...Ch. 4 - Hawk Enterprises identified the following items on...Ch. 4 - Exercise 4-49 Recording Petty Cash Account...Ch. 4 - Exercise 4-50 Cash Reporting OBJECTIVE a Brown...Ch. 4 - Exercise 4-51 Components of Cash The office...Ch. 4 - OBJECTIVE 9 Exercise 4-52 Operating Cycle Business...Ch. 4 - OBJ ECTWE 6 Exercise 4-53 Operating Cycle A list...Ch. 4 - Exercise 4-54 Operating Cycle and Current...Ch. 4 - Problem 4-55A Role of Internal Control Internal...Ch. 4 - Problem 4-56A Internal Control Procedures for Cash...Ch. 4 - Problem 4-5?A Internal Control for Cash After...Ch. 4 - OBJECTIVE Problem 4-53.11 Bank Reconfirmation E...Ch. 4 - OBJECTIVEG Problem 4-5944 Bank Reconciliation...Ch. 4 - Problem #6016; Bank Reconciliation OBJECTIVE The...Ch. 4 - OBJECTIVE Problem 4-6111 Recording Petty Cash...Ch. 4 - Problem 4-553 Role of Internal Control Internal...Ch. 4 - Problem 4-563 Internal Control Procedures for Cash...Ch. 4 - Problem 4-515 internal Control for Cash After...Ch. 4 - Problem 4-585 Bank Reconciliation OBJECTIVE o...Ch. 4 - OBJECTNE The items on the bank statement are...Ch. 4 - Problem 4-603 Bank Reconciliation OBJECTIVE o The...Ch. 4 - Problem 4-61 B Recording Petty Cash Transactions...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-63 The Operating Cycle There are two retail...Ch. 4 - Case 4-63 The Operating Cycle There are two retail...Ch. 4 - Case 4-64 Internal Controls for Cash Disbursements...Ch. 4 - Case 4-64 Internal Controls for Cash Disbursements...Ch. 4 - Case 4-65 Internal Controls for Collection of...Ch. 4 - Case 4-66 Cash Management Hollis Corporation has...Ch. 4 - Case 4-66 Cash Management Hollis Corporation has...Ch. 4 - Case 4-67 Cash and Internal Controls Identify a...Ch. 4 - Case 4-67 Cash and Internal Controls Identify a...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...

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