Question

Consider the following financial statement information for the Hop Corporation:

Item	Beginning						Ending
Inventory	$	11,700					$	12,700
Accounts receivable		6,700						7,000
Accounts payable		8,900						9,300
Net sales				$	97,000
Cost of goods sold					77,000

Calculate the operating and cash cycles. (Use 365 days a year. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Answer 1

Beginning $ 11,700 $ 12,700 $ 12,200.00 6,700 7,000 6,850.00 8,900 $ 9,300 $ 9,100.00 Ending Item Average Inventory Accounts receivable $ Accounts payable Net sales Cost of goods sold 97,000 $ 77,000 Average inventoryx365 Cost of goods sold Average receivablesx365 Credit sales Average payablex365 Cost of goods sold Days sales in inventory 57.83 Days 25.78 Days 43.14 Days Average collection period |Average payment period 83.61 Days Operating cycle Days sales in inventory+Average collection period 40.47 Days Cash cycle Operating cycle- Average payment period