Junior Jumbo Berhad has a gross profit margin of 25% and sales of RM8 million. Of...
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Junior Jumbo Berhad has a gross profit margin of 25% and sales of RM8 million. Of its sales, 80% are on credit while the remainder are cash sales. Junior Jumbo's current assets equal RM500,000 and current liabilities amount to RM80,000. It also has RM36,000 in cash plus marketable securities. Required: If the firm's accounts receivable balance is RM250,000, determine its average collection period. If the firm reduces its average collection period to 12 days, determine its new level of accounts a. b. C. receivable. Determine Junior Jumbo's costs of goods sold. Junior Jumbo Berhad has a gross profit margin of 25% and sales of RM8 million. Of its sales, 80% are on credit while the remainder are cash sales. Junior Jumbo's current assets equal RM500,000 and current liabilities amount to RM80,000. It also has RM36,000 in cash plus marketable securities. Required: If the firm's accounts receivable balance is RM250,000, determine its average collection period. If the firm reduces its average collection period to 12 days, determine its new level of accounts a. b. C. receivable. Determine Junior Jumbo's costs of goods sold.
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Answer rating: 100% (QA)
a To determine the average collection period we need to use the following formula Average Collection ... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
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