Kesuma Agih Bhd.'s total sales for the year ended 31 December 2007 was RM10.6 million. The...
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Kesuma Agih Bhd.'s total sales for the year ended 31 December 2007 was RM10.6 million. The annual credit sales amounted to 70% of the total annual sales. The outstanding balances of accounts receivables for the year were 30% of the total annual credit sales. The inventory turnover period shows that the company took 62 days to convert the raw material into finished goods and to sell the goods to customers. The outstanding payables were RM1.3 million, with annual purchases of RM4 million. Required: (a) (b) State TWO ways in which the level of trade receivables of a business could be reduced. Calculate the following: (1) Receivables collection period. Payables payment period. (ii) (iii) Working capital cycle. Kesuma Agih Bhd.'s total sales for the year ended 31 December 2007 was RM10.6 million. The annual credit sales amounted to 70% of the total annual sales. The outstanding balances of accounts receivables for the year were 30% of the total annual credit sales. The inventory turnover period shows that the company took 62 days to convert the raw material into finished goods and to sell the goods to customers. The outstanding payables were RM1.3 million, with annual purchases of RM4 million. Required: (a) (b) State TWO ways in which the level of trade receivables of a business could be reduced. Calculate the following: (1) Receivables collection period. Payables payment period. (ii) (iii) Working capital cycle.
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Answer rating: 100% (QA)
a Trade Receivables is the amount of business owned by the customers this amount is current assets of the company When sales are done in credit balanc... View the full answer
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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