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Inventory Period

The document contains several word problems related to accounting concepts such as inventory period, accounts receivable period, accounts payable period, operating cycle, and cash cycle. It asks the reader to calculate values for these accounting periods and cycles based on sales, costs of goods sold, beginning and ending inventory balances, accounts receivable balances, accounts payable balances, and turnover rates that are provided in the questions. It also contains questions about calculating cash collections, cash disbursements, and ending cash balances based on sales, costs of goods sold, accounts receivable and payable periods, and other cash inflows and outflows.

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Ilham Hamzah
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55 views4 pages

Inventory Period

The document contains several word problems related to accounting concepts such as inventory period, accounts receivable period, accounts payable period, operating cycle, and cash cycle. It asks the reader to calculate values for these accounting periods and cycles based on sales, costs of goods sold, beginning and ending inventory balances, accounts receivable balances, accounts payable balances, and turnover rates that are provided in the questions. It also contains questions about calculating cash collections, cash disbursements, and ending cash balances based on sales, costs of goods sold, accounts receivable and payable periods, and other cash inflows and outflows.

Uploaded by

Ilham Hamzah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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INVENTORY PERIOD

e 55. Stoney Brooke, Inc. has sales of $890,000 and cost of goods sold of $640,000. The firm had a
beginning inventory of $36,000 and an ending inventory of $46,000. What is the length of the
inventory period?
a. 15.24 days
b. 15.61 days
c. 21.19 days
d. 21.71 days
e. 23.38 days

ACCOUNTS RECEIVABLE PERIOD


b 59. Weson, Inc. has sales of $462,000, costs of goods sold of $308,000 and average accounts
receivable of $48,900. How long does it take their credit customers to pay for their purchases?
a. 36.09 days
b. 38.63 days
c. 41.23 days
d. 44.20 days
e. 57.95 days

ACCOUNTS PAYABLE PERIOD


e 60. LoDo, Inc. has sales of $642,000 and average accounts payable of $36,400. The cost of goods
sold is equivalent to 65 percent of sales. How long does it take LoDo to pay their suppliers?
a. 11.46 days
b. 13.45 days
c. 20.69 days
d. 26.18 days
e. 31.84 days

OPERATING CYCLE
b 62. A firm has an inventory turnover rate of 16, a receivables turnover rate of 21 and a payables
turnover rate of 11. How long is the operating cycle?
a. 37.00 days
b. 40.19 days
c. 42.87 days
d. 63.08 days
e. 73.37 days

OPERATING CYCLE
e 63. Your firm currently has an operating cycle of 64 days. You are analyzing some operational
changes which are expected to decrease the accounts receivable period by 3 days and decrease
the inventory period by 2 days. The accounts payable turnover rate is expected to increase from
7 to 9 times per year. If all of these changes are adopted, what will your firm’s new operating
cycle be?
a. 47 days
b. 51 days
c. 54 days
d. 57 days
e. 59 days
CASH CYCLE
e 66. Wislon, Inc. has an inventory turnover rate of 15, an accounts payable period of 54
days and an accounts receivable period of 37 days. What is the length of the cash
cycle?
a. -7.33 days
b. -2.00 days
c. 2.00 days
d. 6.50 days
e. 7.33 days

CASH CYCLE
a 67. Drefus, Inc. has an inventory turnover of 15 and an accounts receivable turnover of 9.
The accounts payable period is 51 days. What is the length of the cash cycle?
a. 13.89 days
b. 14.07 days
c. 14.23 days
d. 18.79 days
e. 23.00 days

CASH COLLECTIONS
a 71. ABC, Inc. has a beginning receivables balance on January 1st of $430. Sales for
January through April are $240, $250, $330 and $350, respectively. The accounts
receivable period is 60 days. How much did the firm collect in the month of March?
Assume that a year has 360 days.
a. $240
b. $250
c. $330
d. $350
e. $430

CASH COLLECTIONS
c 72. Smith and Johnson have expected sales of $380, $340, $430 and $480 for the months of
January through April, respectively. The accounts receivable period is 15 days. How much did
the firm collect in the month of March? Assume that a year has 360 days.
a. $340
b. $360
c. $385
d. $430
e. $455

CASH DISBURSEMENTS
c 76. Weisbro and Sons purchase their inventory one quarter prior to the quarter of sale. The
purchase price is 60 percent of the sales price. The accounts payable period is 60 days.
The accounts payable balance at the beginning of quarter one is $27,500. What is the
amount of the expected disbursements for quarter two given the following expected
quarterly sales?
Quarter 1 $31,000
Quarter 2 $34,000
Quarter 3 $42,000
Quarter 4 $51,000
a. $19,200
b. $20,400
c. $22,000
d. $25,200
e. $32,000

CASH DISBURSEMENTS
b 77. Birds Unlimited has a 45 day accounts payable period. The firm has expected sales of $1,800,
$2,100, $2,400 and $2,800, respectively, by quarter for the next calendar year. The cost of
goods sold for a quarter is equal to 65 percent of the next quarter sales. What is the amount of
the projected cash disbursements for accounts payable for Quarter 2 of the next year? Assume
that a year has 360 days.
a. $1,125.00
b. $1,462.50
c. $1,690.00
d. $2,125.50
e. $2,250.00
CASH BALANCE
a 79. As of the beginning of the quarter, you have a cash balance of $250. During the quarter you pay
your suppliers $310. Your accounts receivable collections are $420. You also pay an interest
payment of $30 and a tax bill of $180. In addition, you borrow $75, What is your cash balance
at the end of the quarter?
a. $225
b. $245
c. $255
d. $275
e. $285

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