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lilavasa [31]
2 years ago
15

The financial statements of the Pharoah Company report net sales of $372000 and accounts receivable of $56400 and $27600 at the

beginning of the year and the end of the year, respectively. What is the average collection period for accounts receivable in days? (Use 365 days for calculation.) 41.2 81.7 31.0 51.3
Business
2 answers:
snow_lady [41]2 years ago
8 0

Answer:

the average collection period for accounts receivables is 41.2 days

Explanation:

Average Collection Period measures the amount of time it takes to collect credit from accounts owing.

Average Collection Period = Average Accounts Receivables / (Sales/365)

                                            =(($27600+ $56400)/2) / ( $372000/365)

                                            = $42,000/1019.178082

                                            = 41.20967742

                                            = 41.2 days

                             

zavuch27 [327]2 years ago
7 0

Answer:

41.2 days

Explanation:

The average collection period for accounts receivable basically measures how long it takes in days to collect credit sales. Usually companies use sales terms like 2/10, n/30 which try to make clients pay faster, but it doesn't always work. There is no rule that states what collection is good and which one is bad (too long) but it generally depends on the sales policy and it is always better if the collection period is not longer than the normal credit term.

we need to calculate inventory turnover first:

inventory turnover = net sales / (average accounts receivable) = $372,000 / [($56,400 + $27,600) / 2] = $372,000 / $42,000 = 8.857

now we divide 365 days by 8.857 = 41.2 days

this means that it takes 41.2 days on average to collect an account receivable.

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According to the law of supply what's the result of an increase in the supply of workers for a job if all other factors remain e
Roman55 [17]

Answer:

According to the law of supply, an increase in the supply of workers for a job if all other factors remain equal means the company wants to be efficient and it is also proof that the company is making more profit which signals the demand for the commodities they produced as increased drastically.

Explanation:

The law of supply work in the dimension of price, the number of goods available in the market, and it is hugely affected by demand. Now, when the price of goods decreases, it makes production by producers decrease as well and staffs are also laid off to avoid profit loss by the producers. This changes when the price of commodity increases as it makes producers of the commodity have the capacity to employ more staff to maximize time and this also causes the producers to increase sales. However, the higher demand for a commodity would also increase the supply of that commodity.

6 0
3 years ago
In a private company’s accounting system, inputs are _______________ and outputs are _________.
kirill [66]
The choices can be found elsewhere and as follows:

A. marketing strategy-type information;sales data

B. results of surveys on consumer satisfaction; accounts payables

C. transactions such as sales, payroll, and other expenses; financial statements

D.transactions such as the cash flow statement; payroll taxes


I think the correct answer is option D. In a private company’s accounting system, inputs are transactions such as the cash flow statement and outputs are payroll taxes. Hope this answers the question.

6 0
3 years ago
Imagine that you have received an overdraft notice on your checking account. Which steps should you take? Sort these options int
attashe74 [19]

Answer:

"Actions To Take"

Check my records first

Contact the bank right away

Handle the matter quickly

"Actions To Avoid"

Set the note aside and wait until later

6 0
2 years ago
Read 2 more answers
Which of the following reflect the balances of prepayment accounts prior to adjustment?
egoroff_w [7]

Answer:

The answer is Balance sheet accounts are overstated and income statement accounts are understated.

Explanation:

6 0
2 years ago
RuthAnn is 28 years old and is retiring at the age of 65. When she retires, she estimates that she will need an annual income of
inessss [21]

Answer:

Yes

Explanation:

From her current age of 28 to her retirement age of 65, RuthAnn has (65 - 28 =) 37 more years to work.

If she saves 11% of her annual income of $36,278.13 into a 401(k), she will be setting aside (11% * 36,278.13 =) $3,990.59 into the 401(k) account annually.

At 7.1% compounding rate, in 37 years, RuthAnn would have set aside an amount estimated by the future value of an annuity formula.

FV = \frac{A(1+r)^{n} - 1}{r}

where FV is the future value, the amount that would have been set aside,

A = is the annual savings,

r = is the compounding rate, and

n = is the number of years.

Therefore, the total amount that would be saved up after 37 years =

FV = \frac{3,990.59(1+0.071)^{37} - 1}{0.071}

= (3,990.59 * 11.6535)/0.071

= $654,990.31.

By spending $32,523 annually from an account earning 7.1% compound interest rate for 30 years, the present value of the total amount needed by RuthAnn today that will be sufficient for her retirement spending can be estimated using the present value of an annuity formula.

PV = \frac{A(1 - (1+r)^{-n}}{r}

= PV = \frac{32,523(1 - (1.071)^{-30}}{0.071}

= (32523 * 0.8723)/0.071

= $399,574.83.

Since the amount saved up ($654,990.31) is more than the total amount required for RuthAnn's retirement ($399,574.83), RuthAnn has more than sufficient to meet her Retirement goal.

Specifically, the amount she has saved up can support a maximum annual spending which can be estimated from the present value of an annuity formula.

PV = \frac{A(1 - (1+r)^{-n}}{r}

where PV = the amount saved up, $654,990.31,

A = the annual spending which we are estimating,

r = the 7.1% compound interest rate,

n = the number of years to retirement.

654,990.31 = \frac{A(1 - (1.071)^{-30}}{0.071}

= 654,990.31 = (A * 0.8723)/0.071

= A = 654,990.31/0.8723 * 0.071

= A = 53,312.29

Thus, the amount saved up can support a maximum retirement spending of $53,312.29, which is higher than the $32,523 annual income needed by RuthAnn for her retirement.

6 0
2 years ago
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