Answer: $400,000
Explanation:
Days Sales Outstanding is used by a firm to estimate the amount of its accounts receivable.
DSO (Days Sales Outstanding) = Accounts Receivables/Average Sales per day
Where DSO= 20 days
Average sales per day= $20,000
Accounts receivable (AR) =?
20=AR/20000
Cross multiply to make AR the subject of the formula
Accounts Receivables = 20 x 20000
AR=$400,000.
Answer:
The best illustration of a firm adhering to the goal of financial management is:
b. Decrease in the per-unit production costs
Explanation:
Financial management is the process by which a firm plans, controls and monitors their financial resources to ensure that the cost is minimized, while at the same time maximizing their profit. Since financial resources is the fuel that drives a business, its usage has to be managed to ensure short-term and long-term financial success. This is done by increasing the value creating efficiency with very minimal financial resources. To achieve the goal of financial management, various strategies have to be applied to achieve this goal. They include;
1. Financial planning: good financial management indicates that a firm needs have prior information on how their business operates. With this information, the financial managers can therefor plan for the future. Each firm has it's organizational and operational financial needs. These needs if known earlier, a financial plan can be drafted and implemented to adequately meet these needs.
2. Budgeting: this is a tool that can be used to know how much a firm is willing to spend in terms of cost. Budgets are usually broken down into categories in order to know which sectors utilize the highest amount of financial resources to minimize wastage.
3. Risk management: a firm needs to first assess sources and levels of risk, then mitigate against the risk. Risk mitigation if done appropriately can help save on costs associated with the risk.
4. Monitoring: all the strategies applied need to be constantly evaluated to ascertain that they are productive. This is beneficial in determining the strategies that work and those that need improvement.
In our case the best illustration of a firm adhering to the goal of financial management is a decrease in the per-unit production costs.
Answer:
Diversification
Explanation:
Corporate level strategy is a decision made by the top management of a firm with the aim of seeking new business methods to expand an already existing business. Diversification is a corporate level strategy in which an organization ventures into a completely new market with new product lines. The diversification could be related to the existing products the company operates (concentric diversification) or to an unrelated market(conglomerate diversification).
When Lucky Cement decided to start a new business in completely new lines, they have just embarked on diversification. The diversification might also be to just one product or different products.
Answer: Please refer to Explanation
Explanation:
We shall do the accounting entries as follows,
Purchase of the stock
January 2
DR Investment in Fain Stock $600,000
CR Cash $600,000
The share of Fain income
December 31
DR Investment in Fain Stock $56,000
CR Revenue from Investment (40% * $140,000 income) $56,000
The dividends received from Fain Company.
December 31
DR Cash (40% * $50,000 dividend payout) $20,000
CR Investment in Fain Stock $20,000
If you need any clarification do comment.
Cheers.