Question

QUESTION 7 Consider the following financial statement information for the Newk Corporation: Beginning Ending Inventory $ 10,500 11 500 Accounts receivable 5,500 5,800 Accounts payable 7.700 8,100 Credit sales $ 85,000 Cost of goods sold 65,000 Calculate the cash cycle. (Use 365 days a year. Do not round intermediate calculations and round your answers to 2 decimal places, e... 32.16.) MISTIAL

Answer 1

Item Inventory Accounts receivable Accounts payable Beginning $ 10,500 $ $ 5,500 $ $ 7,700 $ Ending 11,500 $ 5,800 $ 8,100 $ Average 11,000 5,650 7,900 Net sales Cost of goods sold $ $ 85,000 65,000 Days sales in inventory Average collection period Average payment period Average inventoryx365:Cost of goods sold Average receivablesx365:Credit sales Average payablex365:Cost of goods sold 61.77 Days 24.26 Days 44.36 Days Operating cycle Days sales in inventory+Average collection period 86.03 Days Operating cycle - Average payment period 41.67 Days

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