19th Edition

ISBN: 9781947172685

Author: OpenStax

Publisher: OpenStax College

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Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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Textbook Question

Chapter 9, Problem 12Q

Berry 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)?

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Chapter 9, Problem 11Q

Chapter 9, Problem 13Q

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South 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)?

Millennial Manufacturing has net credit sales for 2018 in the amount of $1,453,630, beginning accounts receivable balance of $590,900, and an ending accounts receivable balance of $624,450. A. Compute the accounts receivable turnover ratio and the number of days' sales in receivables ratio for 2018. Round answers to two decimal places. Accounts receivable turnover ratio times Sales in receivables ratio days B. What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of day's sales ratio is 180 days? a. Millennial Manufacturing collects its accounts more quickly than its competitors. b. A lender may favour Millennial Manufacturing over its competitors because of its faster collection period. C. Without prior years' data it is hard to tell if Millennial Manufacturing is really more efficient than its competitors. d. All of the above statements may be correct.

In 2022, Sandhill Co. has net credit sales of $1,833,000 for the year. It had a beginning accounts receivable (net) balance of $110,000 and an ending accounts receivable (net) balance of $125,000. Calculate Sandhill Co.'s average collection period in days. (round answer to 1 decimal place)

Chapter 9 Solutions

Principles of Accounting Volume 1

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