Question

The Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and sales of $8.7 million last year. 70 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.4 million, its current liabilities equal $295,900, and it has $109,500 in cash plus marketable securities.

a. If Brenmar's accounts receivable equal $562,300, what is its average collection period?

b. If Brenmar reduces its average collection period to 25 days, what will be its new level of accounts receivable?

c. Brenmar's inventory turnover ratio is 8.1 times. What is the level of Brenmar's inventories?

Answer #1

(Efficiency analysis) The Brenmar Sales Company had a gross
profit margin (gross profits÷sales) of 32 percent and sales of
$9.8 million last year. 78 percent of the firm's sales are on
credit, and the remainder are cash sales. Brenmar's current
assets equal $1.4 million, its current liabilities equal $295,600,
and it has $102,300 in cash plus marketable securities.
a. If Brenmar's accounts receivable equal $563,200, what is
its average collection period?
b. If Brenmar reduces its average collection period...

The Brenmar Sales Company had a gross profit margin (gross
profits divided by ÷sales) of 25 percent and sales of $ 9.5
million last year. 70 percent of the firm's sales are on credit,
and the remainder are cash sales. Brenmar's current assets equal
$ 1.3 million, its current liabilities equal $298,600, and it has
$104,200 in cash plus marketable securities.
a. If Brenmar's accounts receivable equal $563,200, what is
its average collection period?
b. If Brenmar reduces its...

The Tabor Sales Company had a gross profit margin (gross profits
divided by sales) of 30.7 percent and sales of $9.4 million last
year. Seventy-five percent of the firm's sales are on credit and
the remainder are cash sales. Tabor's current assets equal $2.7
million, its current liabilities equal $283000 , and it has $98000
in cash plus marketable securities.
a. If Tabor's accounts receivable are $562500 , what is its
average collection period?
b. If Tabor reduces its average...

(Evaluating liquidity) The Tabor Sales Company had a gross
profit margin (gross profits ÷ sales) of 30.0 percent and sales
of $9.0 million last year. Seventy-five percent of the firm's
sales are on credit and the remainder are cash sales. Tabor's
current assets equal $1.5 million, its current liabilities equal
$300,000, and it has $100,000 in cash plus marketable
securities.
a. If Tabor's accounts receivable are $562,500, what is its
average collection period?
b. If Tabor reduces its average collection...

(Evaluating liquidity) The Tabor Sales Company had a gross
profit margin (gross profits divided by ÷sales) of 30.4 percent
and sales of $9.2 million last year. Seventy-five percent of the
firm's sales are on credit and the remainder are cash sales.
Tabor's current assets equal $2.1 million, its current
liabilities equal $319,000, and it has $99,000 in cash plus
marketable securities.
a. If Tabor's accounts receivable are $562,500, what is its
average collection period?
b. If Tabor reduces its average...

(Evaluating liquidity) The Tabor Sales Company had a gross
profit margin (gross profits divided by sales) of 30.0 percent
and sales of $9.0 million last year. Seventy-five percent of the
firm's sales are on credit and the remainder are cash sales.
Tabor's current assets equal $1.5 million, its current
liabilities equal $300 comma 000, and it has $100 comma 000 in
cash plus marketable securities.
a. If Tabor's accounts receivable are $562 comma 500, what is
its average collection period?...

?(Evaluatingliquidity?)
The Tabor Sales Company had a gross profit margin?
(grossprofitsdivided by÷?sales)of 30.3 percent and sales of ?$9.1
million last year.? Seventy-five percent of the? firm's sales are
on credit and the remainder are cash sales.? Tabor's current assets
equal ?$2.7 ?million, its current liabilities equal ?$310,000 and
it has 105,000 in cash plus marketable securities.
a. If? Tabor's accounts receivable are
?$562,500 what is its average collection? period?
b. If Tabor reduces its average collection
period to 24 ?days,...

(Efficiency analysis) The Brenmar Sales Company had a gross
profit margin (gross
profitsdivided by÷sales)
of
27
percent and sales of
$8.5
million last year.
73
percent of the firm's sales are on credit, and the remainder
are cash sales. Brenmar's current assets equal
$1.1
million, its current liabilities equal
$303,200,
and it has
$100,400
in cash plus marketable securities.a. If Brenmar's accounts
receivable equal
$563,200,
what is its average collection period?b. If Brenmar reduces its
average collection period to...

A Corp. had total sales of $1,000,000 in 2018 (80 % of its sales
are credit). The company's gross profit margin is 20%, its ending
inventory is $100,000, and its accounts receivable balance is
$60,000. What additional amount of cash could the firm have
generated if it had increased its inventory turnover ratio to 10.0
and reduced its average collection period to 22.375 days. With the
same level of sales?

A firm has sales of $1.4 million, and 10 percent of the sales
are for cash. The year-end accounts receivable balance is
$205,000.
What is the average collection period? (Use a 360-day year.
Do not round intermediate calculations. Round your final answer to
2 decimal places.)

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