The following data available for UFO Deli Ltd.

Account	Beginning balance	Ending Balance	Use/source of cash
Accounts payable	27,400	25,500
Inventory	62,600	67,700
Long term debts	125,500	95,600
Common stock	220,400	245,500

Other information:

• The company just placed an order for 700 kg of chicken drumsticks at a unit price of $3/kg. The supplier offers credit terms of 2/15, net 45.
• Beginning balance of accounts receivable is $27,500. Ending balance of accounts receivable of $26,800
• Total revenue (all sales are on credit) is $287,500
• Total cost of goods sold is $195,000

Required:

1. What is the discount being offered by the supplier to UFO Deli Ltd. ? How quickly must the company pay to get the discount? If the company takes the discount, how much should they pay? 
2. Calculate and identify the source of cash or the use of cash for each account by filling into the column next to the ending balance
3. Calculate the operating cycle and interpret the outcome

Answer rating: 100% (QA)

A Discount being offered Listed price or gross price X Discount 700 Kg X 3 X 2 42 To get the discoun... View the full answer