ACCOUNTING-Compute the cash cycle based on the following information

QUESTION 1

Compute the cash cycle based on
the following information:

Average Collection Period = 47
Accounts Payable Period = 40
Average Age of Inventory = 55

1 points

QUESTION 2

Month	Sales $	Month	Sales $
Jan	41,700	July	39,182
Feb	18,921	Aug	17,281
Mar	17,281	Sep	41,700
Apr	39,182	Oct	17,281
May	41,700	Nov	18,921
June	18,921	Dec	39,182

Sales are collected as follows:

In the month of Sales: 20%
In the next month: 28%
After 2 months: 10%
After 3 months: remainder is collected

Calculate the cash collection for December.

Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 3

Which one of the following is most indicative of a flexible
short-term financial policy?

		Relatively high ratio of current assets to total assets
		Relatively low level of inventory
		Relatively low level of accounts receivable
		Relatively high ratio of short-term debt to total debt
		Relatively low level of liquidity

1 points

QUESTION 4

Month	Sales $	Month	Sales $
Jan	47,489	July	36,085
Feb	34,128	Aug	39,903
Mar	39,903	Sep	47,489
Apr	36,085	Oct	39,903
May	47,489	Nov	34,128
June	34,128	Dec	36,085

Sales are collected as follows:

In the month of Sales: 41%
In the next month: 30%
After 2 months: 6%
Remainder is considered as bad debt and is not collected.

Calculate the cash collection for June.

Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 5

OnJuly 15^th, you purchased $10,000
worth of goods. The terms of the sale were 1/9, net 46. What is the effective
annual rate of interest for the credit period for this sale?

Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box.

1 points

QUESTION 6

Compute the Accounts Payable (A/P) period
based on the following information:

Average A/P balance = $67,660
Annual Cost of Goods Sold = $118,631
Assume 365 days

Enter your answer rounded off to two decimal
points. For example, if your answer is 12.345 then enter as 12.35 in the answer
box.

1 points

QUESTION 7

ABC Company has an average collection period of 41 days and
factors all of its receivables immediately at a 3 percent discount. Assume all
accounts are collected in full. What is the firm’s effective cost of borrowing?

Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box.

1 points

QUESTION 8

ABC Corporation currently has
an inventory turnover of 39.74, a payables turnover of 9.13, and a receivables
turnover of 21.02. How many days are in the operating cycle?

Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 9

Month	Sales $	Month	Sales $
Jan	20,740	July	27,944
Feb	42,200	Aug	32,693
Mar	32,693	Sep	20,740
Apr	27,944	Oct	32,693
May	20,740	Nov	42,200
June	42,200	Dec	27,944

Sales are collected as follows:

In the month of Sales: 34%
In the next month: 23%
After 2 months: 9%
After 3 months: remainder is collected

Calculate the cash collection for November.

Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 10

As of this morning, your firm
had a ledger balance of $3,854 with no outstanding deposits or checks. Today,
your firm deposited 8 checks in the amount of $444 each and wrote 3 checks in
the amount of $666 each. What is the amount of the disbursement float as of the
end of the day?

Do not enter $ or comma in the
answer box. For example, if your answer is $12.345 then enter as 12.35 in the
answer box.

1 points

QUESTION 11

ABC Company has annual sales of
$400,000 and cost of goods sold of $79,161. The accounts payable period is
34.53 days. What is the average accounts payable balance?

Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 12

Which of the following is a Source of Cash?
Choose only one.

		Increase in long-term debt
		Increase in current assets
		decrease in current liabilities
		Increase in fixed assets
		decrease in equity

1 points

QUESTION 13

The terms of the sale were 3/14, net 51. What is the effective
annual rate of interest?

Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box.

1 points

QUESTION 14

ABC Company writes 180 checks a
day for an average amount of $663 each. These checks generally clear the bank
in 3 days. In addition, the firm generally receives an average of $178,948 a
day in checks that are deposited immediately. Deposited funds are available in
1 days. What is the firm’s net float?

Do not enter $ or comma in the answer box. For
example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 15

As of this morning, your firm
had a ledger balance of $4,885 with no outstanding deposits or checks. Today,
your firm deposited 7 checks in the amount of $231 each and wrote a check in
the amount of $877. What is the amount of the collection float as of the end of
the day?

Do not enter $ or comma in the
answer box. For example, if your answer is $12.345 then enter as 12.35 in the
answer box.

1 points

QUESTION 16

ABC Company has a cash cycle of
12.26 days, an operating cycle of 22.48 days, and an average collection period
of 5 days. The company reported cost of goods sold of $239,688. What is the
company’s average balance in Accounts Payable?

Enter your answer rounded off
to two decimal points. Do not enter $ or comma in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box

1 points

QUESTION 17

Month	Sales $	Month	Sales $
Jan	38,325	July	26,993
Feb	45,451	Aug	31,647
Mar	31,647	Sep	38,325
Apr	26,993	Oct	31,647
May	38,325	Nov	45,451
June	45,451	Dec	26,993

The company has estimated expenses as
follows:

General and administrative expenses: $4,408
Material purchases are 62 percent of sales. Material purchases are paid in the
month following the purchase.
Interest payment per month: $3,821
Rent expenses per quarter starting March: $6,356

Calculate the cash outflows for June.

Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 18

Identify which of the following will increase
the operating cycle. Choose only one.

		Decrease in inventory turnover ratio
		decrease in days’ sales in inventory
		decrease in average collection period
		decrease in accounts payable period
		decrease in accounts payable turnover ratio

1 points

QUESTION 19

ABC Company has annual sales of
$473,747 and cost of goods sold of $198,600. The average accounts receivable
balance is $67,433. How many days on average does it take the firm to collect
its accounts receivable? Assume 365 days.

Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 20

ABC Corporation currently has
an inventory turnover of 24.11, a payables turnover of 12.9, and a receivables
turnover of 15.4. How many days are in the cash cycle?

Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 21

Identify a source of cash from below. Choose
only one.

		decrease in current liabilities
		decrease in long-term debt
		Increase in fixed assets
		Decrease in accounts receivable
		increase in inventory

1 points

QUESTION 22

Indicate the effect of the following on the
cash cycle: Accounts payable turnover goes up

		No change
		Increase
		Decrease

1 points

QUESTION 23

Indicate the effect of the following on the
operating cycle: Customers take longer to make the payment

		No change
		Decrease
		Increase

1 points

QUESTION 24

Indicate the effect of the following on the
operating cycle: Accounts payable goes up

		No change
		Increase
		Decrease