Question

Year Average Inventory $29,000 Accounts Receivable 23,000 Accounts Payable 11,000 Credit Sales = $180,000 COGS =...

Year Average

Inventory $29,000

Accounts Receivable 23,000

Accounts Payable 11,000

Credit Sales = $180,000

COGS = $135,000

How many days are in the operating cycle?

Homework Answers

Answer #1
Inventory $29,000
Accounts Receivable $23,000
Accounts Payable $11,000
Credit Sales $1,80,000
COGS $1,35,000
Days in the operating Cycle Inventory Days + Average Collection Period
Inventory Days
365 days / Inventory Turnover ratio
365 / (COGS / Inventory)         78.41 days
Average Collection period
365/ Receivable Turnover ratio
365/ (Turnover / Receivables)         46.64 days
Operating Cycle       125.05 days
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