Brenda Smith, Inc. had a gross profit margin (gross profits à· sales) of 25 percent and sales of $9.75 million last year. Seventy-five percent of the firm's sales are on credit and the remainder are cash sales. Smith's current assets equal $1,550,000, its current liabilities equal $300,000, and it has $150,000 in cash plus marketable securities.
a. If Smith's accounts receivable are $562,500, what is its average collection period?
b. If Smith reduces its average collection period to 20 days, what will be its new level of accounts receivable?
c. Smith's inventory turnover ratio is eight times. What is the level of Smith's inventories?
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Brenda Smith, Inc. had a gross profit margin (gross profits ÷ sales) of 25 percent and sales of $9.75 million last year. Seventy-five percent of the firm's sales are on credit and the remainder are cash sales. Smith's current assets equal $1,550,000, its current liabilities equal $300,000, and it has $150,000 in cash plus marketable ...
Solution Summary
The solution provides the steps for calculating accounts receivable, collection period, level of inventories.
Smith Motors reports the following account balances: inventory of $33,100, equipment of $84,400, accounts payable of $16,900, cash of $5,000, and accountsreceivable of $22,600. How much does the firm have in net working capital?
$38,800
$43,800
$55,700
$67,500
$72,600
Could not for the life of me figure this one out. I'm sure I'm missing something simple. Please explain the steps made to get the solutions.
Yu Suzuki Company has a balance in its AccountsReceivable control account of $11,000 on January 1, 2008. The subsidiary ledger contains three accounts: Smith Company, balance $4,000; Gr
Please complete these practice problems
To increase the balance in the following accounts, would you debit the account or would you credit the account?
a. Accounts Payable Debit Credit
b. Cash Debit Credit
c. Land Debit Credit
d. Notes Payable
(Journalize Various AccountsReceivable Transactions)
The balance sheet of Antonio Vivaldi Company at December 31, 2007, includes the following.
Notes receivable 36,000
Accountsreceivable 182,000
Less: Allowance for doubtful accounts 17,300 200,800
Transactions in 20
Below find a working trial balance for Smith Company.
Smith Company
31-Dec-12
Trial Balance (accounts in alphabetical order)
Debit Credit
Accounts payable 67,000
Accountsreceivable 24,500
Cash 16,700
Common stock
1. Gomez Electrics needs to arrange financing for its expansion program. Bank A offers to lend Gomez the required funds on a loan in which interest must be paid monthly, and the quoted rate is 8%. Bank B will charge 9%, with interest due at the end of the year. What is the difference in the effective annual rates charged by
The general ledger account for AccountsReceivable shows a debit balance of $40,000. The Allowance for Uncollectible Accounts has a credit balance of $2,000. Net sales for the year were $250,000. In the past, 3 percent of net sales have proved uncollectible. An aging of accountsreceivable results in an estimate of $9,000 of unc
At the end of 2010 Sorter Company has accountsreceivable of $900,000 and an allowance for doubtful accounts of $40,000. On January 16, 2011, Sorter Company determined that its receivable from Ordonez Company of $8,000 will not be collected, and management authorized its write-off. Prepare the journal entry for Sorter Company to
