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3 years ago

Consider the following financial statement information for the Sourstone Corporation:

Business

1 answer:

DENIUS [597]3 years ago

5 0

Answer:

A. 56.32 days

B. 40.38 days

Explanation:

The Operating cycle is the Inventory period + AR period

Inventory period= 365/(Cost of goods sold/Average inventory)

Average inventory= (Beginning Inventory + Ending Inventory)/2

Accounts Receivable period= 365/(Credit Sales/Average Accounts Receivable )

Average Accounts Receivable= (Beginning Accounts Receivable + Ending Inventory Accounts Receivable)/2

Calculated Inventory period= 42.58 days

Calculated Accounts Receivable period= 13.74 days

The Cash cycle is also called the Net Operating cycle which is the Inventory period + Accounts Receivable period- Accounts Payable period

Accounts Payable period= 365/(Cost of goods sold/Average Accounts Payable)

Average Accounts Payable = (Beginning Accounts Payables + Ending Inventory Accounts Payable)/2

Calculated Accounts Payable period= 15.94 days

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2 years ago

Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hicko

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Answer:

Contribution margin for :

STRIP PLANK Income Statement

$ 360,000 $ 190,000 Total Net Sales

-$ 225,000 -$ 120,000 Variable Cost

$ 135,000 $ 70,000 Contributing Margin

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Explanation:

With all the product line operating these are the results:

STRIP PLANK PARQUET Total Income Statement

$ 400,000 $ 200,000 $ 300,000 $ 900,000 Total Net Sales

-$ 225,000 -$ 120,000 -$ 250,000 -$ 595,000 Variable Cost

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-$ 15,000 -$ 10,000 -$ 20,000 -$ 45,000 Supervision

-$ 35,000 -$ 10,000 -$ 25,000 -$ 70,000 Depreciation

$ 120,000 $ 40,000 -$ 45,000 $ 115,000 Segment Margin

If the company keeps the parquet line will get worst result during the year.

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$ 360,000 $ 190,000 $ 0,000 $ 550,000 Total Net Sales

-$ 225,000 -$ 120,000 $ 0,000 -$ 345,000 Variable Cost

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