Question

mework Saved Tableau DA 4-2: Exercise, Analyzing credit terms and computing gross profit LO C1, P1 As owner of Telo, a startup business, you are struggling to generate enough gross profit to compete with Creft and Wozz. Also, your business frequently runs low on cash. To help determine how to fix these issues, you review the following Tableau Dashboard. Sales and Costs for Competing Companies Telo Creft Wozz $100,000 $80,000 $60,000 $40,000 $20,000 $0 Sales Sales discounts Sales Sales returns & allowances Cost of pios spoo6 Sales discounts Sales returns Sales returns & allowances Cost of goods sold Telo's Assets Amounts at December 31 Credit Terms (Days) Supplies Accounts receivable Telo Land Creft Inventory Wozz Buildings Cash 0 10 20 30 40 50 60 70 Telo's Liabilities & Equity Amounts at December 31 Customer Return Policies Across Competitors Retained Earnings Wages payable Common Stock Creft Telo 8 Notes payable Accounts payable Wozz

Answer 1

TELO Gross Profit

TELO YELLOW : $85,000

TELO GREEN Cost of Goods sold: $60,000

TELO PURPLE Sales discounts: $6,000

TELO PINK Sales returns & allowances: $15,000

Solution

Gross Profit of Telo = Net Sales - Cost of Goods Sold

= $ 64,000 - $ 60,000

= $ 4,000

Note 1

Net Sales = Total Sales - Sales Discounts - Sales return and allowances

= $ 85,000 - $ 6,000 - $ 15,000

= $ 64,000

Creft Gross Profit

Creft Yellow Sales: $78,000

Creft Green Cost of goods sold: $56,000

Creft Purple Sales discounts: $5,000

Creft Pink Sales returns & allowances: $3,000

Solution

Gross Profit of Creft  = Net Sales - Cost of Goods Sold

= $ 70,000 - $ 56,000

= $ 14,000

Note 1

Net Sales = Total Sales - Sales Discounts - Sales return and allowances

= $ 78,000 - $ 5,000 - $ 3,000

= $ 70,000

Wooz Gross Profit

Wooz Purple Sales discounts: $4,000

Wooz Pink Sales Returns & allowances: $2,000

Wooz Yellow Sales: $82,000

Wooz Green Cost of gooods sold: $58,000

Solution

Gross Profit of Wooz = Net Sales - Cost of Goods Sold

= $ 76,000 - $ 58,000

= $18,000

Note 1

Net Sales = Total Sales - Sales Discounts - Sales return and allowances

= $ 82,000 - $ 4,000 - $ 2,000

= $ 76,000

Gross Profit

Telo	Creft	Woof
$ 4,000	$ 14,000	$ 18000

Part II

Telo Green Credit Period from Suppliers: 30 days

Telo Red Credit Period Given to Customers: 75 days

Creft Green Credit Period from Suppliers: 35 days

Creft Red Credit Period Given to Customers: 45 days

Wooz Green Credit Period from Suppliers: 40 days

Wooz Red Credit Given to Customers: 50 days

II) Which company has negotiated best credit terms with suppliers	Wooz
III) Which Company has the largest returns and allowances	Telo