# 2024 – Per the instructor s policies calculations on how answers were derived must be shown for

Week 3 – 2024

2024 – Per the instructor s policies calculations on how answers were derived must be shown for.

Per the instructor’s policies, calculations (on how answers were derived) must be shown for

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1) A company collects 60% of its sales during the month of the sale, 30% one month after the sale, and 10% two months after the sale. The company expects sales of \$10,000 in August, \$20,000 in September, \$30,000 in October, and \$40,000 in November.

A) \$25,000

B) \$15,000

C) \$35,000

D) \$95,000

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2) Brewhouse had sales in November of \$60,000, in December of \$40,000, and in January of \$80,000. Brewhouse collects 40% of sales in the month of the sale and 60% one month after the sale. Calculate Brewhouse’s cash receipts for January.

A) \$44,000

B) \$56,000

C) \$64,000

D) \$72,000

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3) Your firm is trying to determine its cash disbursements for the next two months (June and July). In any month, the firm makes purchases of 60% of that month’s sales, which are paid the following month. In addition, the firm incurs the following costs every month and pays for them in the month the expenses are incurred: wages/salaries of \$10,000, rent of \$4,000, and miscellaneous cash expenses of \$1,000.

Depreciation amortized on a monthly basis is \$2,000. June’s sales are expected to be \$100,000, and July’s sales are expected to be \$150,000.

A) \$105,000.

B) \$107,000.

C) \$77,000.

D) \$75,000.

## Annual credit sales

4) Jason’s balance in accounts receivable is \$240,000. Annual credit sales are \$2,880,000. Jason’s average collection period is:

A) 12 days.

B) 30.4 days.

C) 2.5 days.

D) 19 days

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5) Larry and Dave’s has a Cost of Goods Sold of \$60.8 million. The company’s accounts payable balance is \$7.5 million. It’s accounts payable deferral period is:

A) 81 days.

B) 45 days.

C) 8.11 days.

D) 48.7 days.

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6) SuperWave has an average collection period of 49 days, an inventory conversion period of 83 days, and a payables deferrable period of 36 days. What is SuperWave’s cash conversion cycle?

A) 96 days

B) 70 days

C) 85 days

D) 132 days

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7) SuperWave has an average collection period of 49 days, an inventory conversion period of 83 days, and a payables deferrable period of 36 days. What is SuperWave’s operating cycle?

A) 96 days

B) 70 days

C) 85 days

D) 132 days

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8) Swensen’s has an average collection period of 7 days, an inventory conversion period of 30 days, and a payables deferrable period of 60 days. What is Swensen’s operating cycle?

A) 97 days

B) 37 days

C) 23 days

D) -23 days

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9) Alpha’s annual credit sales are \$18 million; the accounts receivable balance is \$1.5 million; the cost of goods sold is \$12.6 million; the inventory balance is \$350,000, and the balance in accounts payable is \$700,000. Compute Alpha’s cash conversion cycle.

A) 105 days

B) 53.5 days

C) -53.5 days

D) 20.28 days

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10) 22) As of December 31, WowWow, Inc. had a cash balance of \$50,000. December sales were \$150,000 and are expected to be \$100,000 in January. 20% of sales in any month are cash sales, and 80% of sales are collected during the following month. In January, WowWow is expected to have total cash disbursements of \$120,000, and WowWow requires a minimum cash balance of \$50,000.

A) \$80,000.

B) \$100,000.

C) \$110,000.

D) \$140,000.

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