3.	Changes in the Operating Cycle. Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change.
a.	Average receivables go up.
b.	Credit payment times for customers are increased.
c.	Inventory turnover goes from 3 times to 7 times.
d.	Payables turnover goes from 6 times to 11 times.
e.	Receivables turnover goes from 7 times to 9 times.
f.	Payments to suppliers are accelerated.
LO 1	4.	Changes in Cycles. Indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change.
a.	The terms of cash discounts offered to customers are made less favorable.
b.	The cash discounts offered by suppliers are increased; thus, payments are made earlier.
c.	An increased number of customers begin to pay in cash instead of with credit.
d.	Fewer raw materials than usual are purchased.
e.	A greater percentage of raw material purchases are paid for with credit.
f.	More finished goods are produced for inventory instead of for order.

LO 3

5.

Calculating Cash Collections. The Bass Company has projected the following quarterly sales amounts for the coming year:

Page 540

a.	Accounts receivable at the beginning of the year are $295. Bass has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following:

b.	Rework (a) assuming a collection period of 60 days.
c.	Rework (a) assuming a collection period of 30 days.
LO 1	6.	Calculating Cycles. Consider the following financial statement information for the Amaryliss Corporation: