Rustic Furniture Co. is owned and operated by Cam Pfeifer. The following is an excerpt from a
Question:
Rustic Furniture Co. is owned and operated by Cam Pfeifer. The following is an excerpt from a conversation between cam pfeifer and Mitzi Wheeler, the chief accountant for Rustic Furniture Co:
Cam: Mitzi, I’ve got a question about this recent balance sheet,
Mitzi: Sure what’s your question?
Cam: Well, as you know. I’m applying for a bank loan to finance our new store In Garden Grove, and notice that the accounts payable are listed as $320,000.
Mitzi: That’s light Approximately $275,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc.
Cam: That’s what I thought, But as you know, we normally receive a 2% discount from our suppliers for earllier payment, and we always try to take the discount.
Mitzi: That’s right. I can’t remember the last time we missed a discount.
Cam: Well, In that case, it seems to me the accounts payable should be listed minus the 2% discount. Let’s list the account payable due suppliers as $314,500, rather than $320,000. Every little bit helps. You never know. It might make the difference between getting the loan and not.
How would you respond to Cam Pfeifer’s request?
Systems analysis and design
ISBN: ?978-1118808177
5th edition
Authors: Alan Dennis, Barbara Haley Wixom, Roberta m. Roth