Question 6 ( 7 marks)

The following data available for Mt Warnings Ltd.

Account	Beginning balance	Ending Balance	Use/source of cash
Accounts payable	22,400	26,500
Inventory	68,600	65,300
Long term debts	115,500	135,600
Common stock	250,400	235,900

Required:

1. 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 (2 marks)
2. Assume the following

• beginning balance of accounts receivable is $25,400
• ending balance of accounts receivable of $23,800
• total revenue (all sales are on credit) is $247,500
• total cost of goods sold is $ 175,000

Calculate the operating cycle and cash cycle and interpret the outcomes (5 marks)