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    Calculate Cash Conversion Cycle; determine net cash from operating activities

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    Cash Conversion Cycle. Calculate the accounts receivable period, accounts payable period, inventory period, and cash conversion cycle for the following firm:

    Income statement data:

    Sales 5,000
    Cost of goods sold 4,200
    Balance sheet data:
    Beginning of Year End of Year
    1. Inventory 500 600
    2. Accounts receivable 100 120
    3. Accounts payable 250 290

    Determine the following:

    4. If assets are $7,000 and capital is $2,000, what are liabilities?
    5. If capital is $17,000 and liabilities are $8,000, what are assets?

    Cash Flow Statement

    Use the following balance sheet information and other data to determine net cash from operating activities:

    December 31, 2000 December 31, 2001
    Account Receivable $ 4,000 $ 7,000
    Merchandise Inventory 10,000 8,000
    Prepaid Insurance 1,000 700
    Accounts Payable 12,000 6,000
    Rent Payable 9,000 16,000
    Dividend Payable 2,000 2,500
    Bonds Payable 50,000 40,000

    Other Data:
    Net Income $25,000
    Depreciation Expense 5,000
    Amortization of Goodwill 3,000
    Amortization of bond premium 900
    Gain on sale of plant 4,400
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