Question

Q1.Assume a 365-day year. Calculate Account Receivable with
the following information.

Total Sales=800 million Cash Sales=70 million Average
collection days=10

Q2. The net profit margin of a firm is 8% and its total asset
turnover is 1.5. What is firm’s Return on Investment?

Answer #1

**Question 1**

**Calculation of
Accounts Receivables.**

**Given information**

**Total Sales= 800 million**

**Cash sales= 70 million**

**Credit sales= Total sales-cash sales (800-70)= 730
million**

**Average Collection days = 10 days**

**Accounts Receivables= (Credit sales/number of days in
year)*Average collection days**

**Accounts Receivables= (730 million
/365)*10days**

**Accounts Receivables=
20 million**

**Question
2.**

**Calculation of
the Return on Investment**

**Return on Investment= Net Income / Cost of Investment
(Total Assets)**

**Net income = Total turnover* net profit
margin%**

**Net income = 800*8%**

**Net income = 64 million**

**Total Assets= Total sales(turnover)/total asset turnover
ration**

**Total Assets = 800/1.5**

**Total Assets= 533.33 millions**

**Return on Investment =64 /533.33**

**Return on
Investment = 12%**

Information follows for Carra Company: 1. The
beginning-of-the-year Accounts Receivable balance was $25,000. 2.
Net sales for the year were $410,000. (Credit sales were $200,000
of the total sales.) Carra does not offer cash discounts. 3.
Collections on accounts receivable during the year were $140,000.
Required: (a) Prepare summary journal entries to record the items
noted above. (b) Calculate Carra Company's accounts receivable
turnover ratio for the year. How old is the average receivable in
days? (c) Use the turnover...

Desai Inc. has the following data, in thousands.
Assume the firm uses a 365-day year.
Annual sales $45,000
Annual cost of goods sold $30,000
Inventory $4,500
Accounts receivable $1,800
Accounts payable $2,500
1. What is the firm’s inventory conversion period?
*
38.93 days
54.75 days
14.60 days
30.42 days
None of the above
2. What is the firm’s average collection period?
*
38.93 days
54.75 days
14.60 days
30.42 days
None of the above
3. What is the firm’s payable...

Sales for the year for Victor Company were $1,200,000, 70
percent of which were on credit. The average gross profit rate was
45 percent on sales. Account balances follow: Beginning Ending
Accounts receivable (net) $ 62,000 $ 76,000 Inventory 77,000 41,000
Required: 1. Compute the turnover for the accounts receivable and
inventory. (Round your answers to 1 decimal place.) 2. Compute the
average age of receivables, and the average days' supply of
inventory. (Use 365 days in a year. Round...

Wildhorse Co. reports the following information (in millions)
during a recent year: net sales, $10,959.9; net earnings, $429.8;
total assets, ending, $5,070.0; and total assets, beginning,
$5,675.0. (a) Calculate the (1) return on assets,
(2) asset turnover, and (3) profit margin. (Round answers to 1
decimal place, e.g. 6.2% and 6.2.)
I need the following help.
return on assets in %
asset turnover
and profit margin

BALANCE SHEET ANALYSIS
Complete the balance sheet and sales information using the
following financial data:
Total assets turnover: 1.3x
Days sales outstanding: 38 daysa
Inventory turnover ratio: 4x
Fixed assets turnover: 2.5x
Current ratio: 2.3x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales =
30%
aCalculation is based on a 365-day year. Do not round
intermediate calculations. Round your answer to the nearest
cent.
Balance Sheet
Cash
$
Current liabilities
$
Accounts receivable
Long-term debt
65,000...

Crane Company reports the following information (in millions)
during a recent year: net sales, $10,177.2; net earnings, $246.7;
total assets, ending, $5,130.0; and total assets, beginning,
$5,150.0.
(a) Calculate the (1) return on assets, (2) asset
turnover, and (3) profit margin. (Round answers to 1
decimal place, e.g. 6.2% and 6.2.)
1.
Return on assets
enter the return on assets in
percentages rounded to 1 decimal places
%
2.
Asset turnover
enter the asset turnover
rounded to 1 decimal places...

The annual sales for Salco, Inc. were $ 4.58 million last year.
The firm's end-of-year balance sheet was as follows:
Current_assets $498,000 Liabilities $1,009,500
Net_fixed_assets 1,521,000 Owners'_equity 1,009,500
Total_Assets $2,019,000 Total $2,019,000
Salco's income statement for the year was as follows:
Sales $4,580,000
Less:_Cost_of_goods_sold (3,490,000)
Gross_profit $1,090,000
Less:_Operating_expenses (504,000)
Net_operating_income $586,000
Less:_Interest_expense (96,000)
Earnings_before_taxes $490,000
Less:_Taxes_(35%) (171,500)
Net_income $318,500
a. Calculate Salco's total asset turnover, operating profit
margin, and operating return on assets.
b. Salco plans to renovate one of...

The Paden Corporation has annual sales of $92 million. The
average collection period is 54 days. What is the average
investment in accounts receivable as shown on the balance sheet?
(Use 365 days per year. Enter your answer in dollars, not
millions of dollars, e.g., 1,234,567. Do not round intermediate
calculations and round your answer to the nearest whole number,
e.g., 32.)
Average accounts receivable
$
Essence of Skunk Fragrances, Ltd., sells 7,300 units of its
perfume collection each...

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?

1. You have the following information:
Accounts
receivable
$160,000
Total credit sales $2,500,000
Assume a 360 day year and compute the receivables collection
period.
2.Inventory conversion period 15 days
Closing inventory $28,000
Compute C O G S (assuming a 360 day year).
3.Inventory conversion
period
68.2 days
Receivables collection period 35.8 days
Payables deferral period 24.6 days
Compute the cash conversion cycle:
4.Inventory conversion period 55.8 days
Days sales outstanding 23.9 days
Days payables outstanding 32.5 days
The cash conversion...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 7 minutes ago

asked 9 minutes ago

asked 20 minutes ago

asked 43 minutes ago

asked 43 minutes ago

asked 52 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago