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Title: Perfect Purchase ElectronicsSelected Income Statement Items, 2009Cash Sales$1,500,000Credit ... Post by: stranahan on Nov 18, 2016 Perfect Purchase Electronics
Selected Income Statement Items, 2009 Cash Sales $1,500,000 Credit Sales $7,500,000 Total Sales $9,000,000 COGS $6,000,000 Perfect Purchase Electronics Selected Balance Sheet Accounts 12/31/2009 12/31/2008 Change Accounts Receivable $270,000 $240,000 $30,000 Inventory $125,000 $100,000 $25,000 Accounts Payable $110,000 $90,000 $20,000 Using the information provided, what is the collection cycle for the firm? A) 10.34 days B) 12.41 days C) 7.60 days D) 6.84 days Title: Re: Perfect Purchase ElectronicsSelected Income Statement Items, 2009Cash Sales$1,500,000Credit ... Post by: flappunctual on Nov 18, 2016 B -- 1. Average accounts receivable = beginning AR + ending AR /2
= $270,000 + $240,000 /2 = $255,000. 2. Accounts receivable turnover = credit sales/ average AR = $7,500,000/$255,000 = $29.41 times. 3. Collection cycle = 365/AR turnover = 365/29.41 = 12.41 days Title: Re: Perfect Purchase ElectronicsSelected Income Statement Items, 2009Cash Sales$1,500,000Credit ... Post by: stranahan on Jan 6, 2017 Thank you for the help. I had a few questions on a few of them and this really confirmed my answers.
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