The Thompson Corporation projects an increase in sales from $1.5 million to $2 million, but it needs and additional $300,00 of current assets to support this expansion. Thompson can finance the expansion by no longer taking discounts, thus increasing accounts payable. Thompson purchases under terms of 2/10, net 30, but can de
Kay's House of Sound sells 520 musical instruments a year at an average price per instrument of $580. All sales are credit sales with terms of 2/10, net 25. Hogan's has found that 78 percent of its customers take advantage of the discounted price. What is the amount of the firm's average accounts receivables?
The trial balance before adjustment for sinatra company shows the following balances DR - Accounts Rec. 82,000 DR - Allowance for doubtful accounts 1,750 CR - Sales 430,000 1. To obtain additional cash, Sinatra factors without recourse 20,000 of accounts receivable with Stills Finance. The finance charge is 10% of the a
Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365-day year. a. Calculate the firm's operating cycle. b. Calculate the firm's cash conversion cycle. c. Calculate the amount of resources needed to support the firm's cash conversion cycle. d. Discuss how management might be able to reduce the cash conversion cycle.
Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no differ
Write a paper to review McDonald's most recent financial reports, such as management comments, and footnotes to financial statements, to explain how each current account has affected cash management strategies.
Jimmy Jack, Inc. is considering relaxing its credit standards in order to meet a competitor's change in credit policy. As a result of the proposed change, sales during the coming year are expected to increase 15%, from 5,000 cars to 5,750 cars, the average collection period is expected to increase from 35 days to 45 days, and ba
Cleaning Maids Inc. is considering shortening its credit period from 30 days to 20 days and believes, as a result of this change, its average collection period will decrease from 36 days to 30 days. Bad debt expenses are also expected to decrease from 1.2% to 0.8% of sales. The firm is currently selling 300,000 units but believe
Indicate whether each of the following accounts normally has a debit or cresit balance. a. common stock b. retained earnings c. certificate of deposit d. interest expense e. accounts receivable f. interest revenue g. insurance expense h. interest payable i. cash j. dividends k. unearned revenue l. operating expense
You have been pricing a compact disk player in several stores. 3 stores have the identical price of $300. Each storecharges 18% APR, has a 30 day grace period, and sends out bills on the 1st of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, stor
2. Please explain how would you record the following Invoices and payment in T accounts: - Invoice #1: Office supplies from Office Depot $150 - Invoice #2: Interest accrual from loan acquired with Bank of America of $40,000 - Invoice #3: Electricity bill from Reliant Energy $700 - Payment of invoice #1 with a wire transfe
Can you help me get started with this assignment? 1. Mike Polanski is 30 years of age and his salary next year will be $40,000. Mike forecasts that his salary will increase at a steady rate of 5 percent per annum until his retirement at age 60. a. if the discount rate is 8 percent, what is the PV of these future salary paym
Why is an accounts receivable aging process in a health care organization important? What would occur if organizations did not use this method?
Need help on the problems in the attached document. Label each answer... be specific as possible.....if you'd like you may use bullet items to respond to the questions... 1. Corporate Finance Organization: In a large corporation, what are the two distinct groups that report to the chief financial officer? Which group
BE9-4 At the end of 2006, Endrun Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2007, the company learns that its receivable from Oswego Inc. is not collectible, and management authorizes a write-off of $6,400. (a) Prepare the journal entry to record the write-off. (
Maria receives two new credit cards on May 1. She had solicited one of them from Midtown Department Store, and the other had arrived unsolicited from the High Flying Airlines. During the month of May, Maria makes numerous a credit card purchases from Midtown Store, but she does not use the High Flying Airlines card. On May 31
See the attached document and answer the eight questions found on the bottom. For question 1, calculate all of the ratios listed in Exhibit 4 of the case. Jim Reed, II had just left a rather unpleasant meeting with his banker, Harold Holmes of First Virginia National Bank. Jim had banked with First Virginia for almost 30 year
Company X has credit sales of $144,000 yearly with credit terms of net 30 days, which is also the average collection period. Company X does not offer a discount for early payment, so it's customers take 30 days to pay. If Company X offered a 2% discount for payment in 10 days and every customer took advantage, (using full sal
Discuss the usefulness of following criteria for credit management 1) Terms of sale 2) The promise to pay 3) Credit analysis 4) The credit decision 5) Collection policy
What is the difference between having available credit, some debt, and some cash vs. no debt, no available credit, and very little cash, because you have always paid all debts with cash?
McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500; 40 % of the customers pay on the 10th day and take discounts, while the other 60% pay on average 40 days after their purchases. A. What is the days' sales outstanding? B. What is the average amount of receivables? C. What is the perc
***IMPORTANT READ**** I NEED CORRECT ANSWERS for these Multiple Choice Questions. Please help ONLY IF YOU KNOW THE CORRECT ANSWERS. THANK YOU. I have done the questions but without answer-sheet I am unable to verify the answers. Only take the assignment if you can get the CORRECT ANSWERS in 3 HOURS. THANK YOU. If
What should the nominal cost of trade credit be to those customers who do not take discounts, based on a 365 day year, assuming that they pay on time, even though they do not?
I have been given a sample of study questions for my upcoming financial management test. Most of it I have been able to do fairly easily, but there are 5 questions I am having a difficult time with. Specifically, I am looking for not only the answer to these following questions, but how you came to get them as this is what I rea
What results lowers or relaxes my company's credit standards?
8-2A At December 31, 2007, Curtis Imports reported this information on its balance sheet Accounts receivable $600,000 Less: Allowance for doubtful accounts $40,000 During 2008, the company had the following transactions related to receivables. 1) Sales on the account
Filing Status, Dependency Exemptions, and Child Credit. For the following taxpayers, indicate which tax form should be used, the applicable filing status, and the number of personal and dependency exemptions available, and the number of children who qualify for the child credit. a. Arnie is a single college student who earned
1. In the management of cash and marketable securities, why should the primary concern be for safety and liquidity rather than maximization of profit? 2. Explain the similarities and differences of lockbox systems and regional collection offices. 3. Why would a financial manager want to slow disbursement? 4. Why are Treasury
A. Compare and contrast various cash management techniques. b. Compare and contrast the various methods of short-term financing.
Audit: Select a publicly traded company for research to write an auditing program for their accounts receivable or inventory.
Access any company that you would like to research via the Internet and look up the company's latest financial statements. Please choose a different company than you have access thus far. Select either Accounts Receivable or Inventory balances. Indicate the amount of the balance for the latest year end and the previous year
When we all talk about the risk of extending credit to corporate customers, what is a quick and easy method of measuring the credit risk of a publicly traded firm?
A company has been selling on a 3/10, net 30 basis. The company changes its credit terms to 2/20, net 90. The change will affect the customer's accounts payable and bank loan by: increasing payables and decreasing bank loans or increasing payables and increasing bank loans