EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 3, Problem 3P
Summary Introduction
To determine: Average accounts receivable balance.
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TMRW Co. has annual credit sales of $1,080,000 and an average collection period of 32 days in 2010. Assume a 360-day year. What is the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period.
XYZ company has annual credit sales of $1,440,000 and an average collection period of 45 days in 2005. Assume a 360 day year. What is the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales time the average collection period.
Haru company has an average collection period of 35 days. The accounts receivable balance is $105,000. What is the value of its credit sales?
If Emperium Inc. had credit sales of 2,027,773 per year and its days sales outstanding was equal to 35 days, what was its average amount of accounts receivable outstanding? (Assume a 365-day year).
CornProducts Corporation ended the year 2018 with an average collection period of 40 days. The firm's credit sales for 2018 were $9 million. What is the
approximate year-end 2018 balance in accounts receivable for Corn Products?
Chapter 3 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 3 - Prob. 1QTDCh. 3 - Prob. 2QTDCh. 3 - Prob. 3QTDCh. 3 - Prob. 4QTDCh. 3 - Prob. 5QTDCh. 3 - Prob. 6QTDCh. 3 - Prob. 7QTDCh. 3 - Prob. 8QTDCh. 3 - Prob. 9QTDCh. 3 - Prob. 10QTD
Ch. 3 - Prob. 11QTDCh. 3 - Prob. 12QTDCh. 3 - Prob. 13QTDCh. 3 - Prob. 14QTDCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Prob. 16PCh. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21P
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- Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning accounts receivable balance of $585,900, and an ending accounts receivable balance of $621,450. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2018 (round answers to two decimal places). What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of days sales ratio is 180 days?arrow_forwardBerry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales for the year are $924,123. The balance at the end of 2017 was $378,550. What is the number of days sales in receivables ratio for 2018 (round all answers to two decimal places)?arrow_forwardSouth Rims has an accounts receivable balance at the end of 2018 of $357,470. The net credit sales for the year are $769,346. The balance at the end of 2017 was $325,300. What is the accounts receivable turnover rate for 2018 (rounded to two decimal places)? A. 2.02 times B. 2.25 times C. 2.15 times D. 1.13 timesarrow_forward
- Watin Inc's 2015 income statement reported net sales of $5,000,000. Watin's average accounts receivable during 2015 amounted to $450,000. Using 360 days to a year, Watin's: A. Accounts receivable turnover rate is approximately 13.8 times. B. Accounts receivable turnover rate is approximately 1.25 times. C. Average number of days to collect an account receivable is 32 days. D. Accounts receivable turnover rate is approximately 2 times.arrow_forwardKnight Roundtable Co. had annual credit sales of $1,080,000 and an average collection period of 32 days in 2018. Assume a 360-day year. What were the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period. Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.60 per unit.arrow_forwardYour company had net sales of $100,000 over the past year. One quarter of the sales were credit sales. During that time, average receivables were $5,000. The accounts receivable balance at the end of the year was $5,000. What was the average collection period? What is the average age of receivables (same answer!)? (Assume a 360-day year) O 18 days O 27 days O 36 days O 72 days O 60 daysarrow_forward
- A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What was its average receivables balance, based on a 365-day year? A) $4,389,657 B) $2,804,795 C) $1,294,521 D) $3,412,500 E)$7,269,231arrow_forwardSouth Rims has an accounts receivable balance at the end of 2018 of $357,470. The net credit salesfor the year are $769,346. The balance at the end of 2017 was $325,300. What is the accounts receivableturnover rate for 2018 (rounded to two decimal places)?arrow_forwardAmmer Products has an average accounts payable balance of P850,000 and its annual net credit purchases is P8,750,000. Assume there are 365 days per year. What is Ammer’s payables deferral period?arrow_forward
- The Malibu Corporation has annual credit sales of $36 million. The average collection period is 38 days. What is the average investment in accounts receivable as shown on the balance sheet?arrow_forwardThe Dire Corporation has an inventory conversion period of 75 days, a receivables collection period of 38 days, and a payables deferral period of 30 days. What is the length of the firm’s cash conversion cycle? If Dire’s annual sales are $3,421,875 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Dire turn over its inventory?arrow_forwardA company has annual sales of $5,210,000 and its average daily accounts receivable is $377,000. What is the average days' sales in receivables? Assume 365 days per year.arrow_forward
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