The following information was taken from the records of Dallen Company for the year 2013: Sales .
Question:
The following information was taken from the records of Dallen Company for the year 2013:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600,000
Beginning inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $114,000
Ending inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $87,000
Beginning accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $68,000
Average collection period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 days
Beginning accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36,000
Ending accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $42,000
Gross profit percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37%
1. Compute the number of days’ sales in inventory.
2. Compute the ending balance in Accounts Receivable.
3. Compute the number of days’ purchases in accounts payable.
4. How many days elapse, on average, between the time Dallen must pay its suppliers for inventory purchases and the time Dallen collects cash from its customers for the sale of that same purchased inventory?
5. Repeat the computations in (1), (2), (3), and (4) using the end-of-year balance sheet balances rather than the average balances.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
1 Inventory Turnover 600000 x 1 037114000 870002 38 Number of Days Sales in Inventory 36538 96 days ...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
