1)

Aqua System Inc. expects to have $16,834,969 in credit sales during the coming year. Currently all checks are sent to the home office. A proposed lockbox system-can eliminate 5 days of float, releasing funds which, when invested, will earn 10.26 percent per year. What annual savings can Aqua System expect if the system is implemented? Use a 365-day year.

Round the answer two two decimal places

2)

Post Card Depot, an large retailer of post cards, orders 7,203,111 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 16 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.24 per post card per year. The ordering cost is $363 per order.

What is the annual carrying costs of post card inventory (round the answer to two decimal places)?

3)

Canadian Bacon Inc. financial statements are presented in the table below.

Based on the information in the table, and using a 365-day year, calculate Days payables outstanding (Payables conversion period).

Round the answers to two decimal places

Balance Sheet December 31, 2013

Cash and marketable securities $112,000 Accounts payable $211,000

Accounts receivable $325,000 Notes payable $51,500

Inventories $426,000 Accrued expenses $50,100

Prepaid expenses $10,700 Total current liabilities $312,600

Total current assets $873,700 Long-term debt $225,000

Gross fixed assets $1,514,000 Par value and paid-in-capital $117,000

Less: accumulated depreciation $315,000 Retained Earnings $1,418,100

Net fixed assets $1,199,000 Common Equity 1,535,100

Total assets $2,072,700 Total liabilities and owner's equity$2,072,700

Income Statement, Year of 2013

Net sales (all credit) $3,256,600.00

Less: Cost of goods sold $2,572,714.00

Selling and administrative expenses $323,000.00

Depreciation expense $115,000.00

EBIT $245,886.00

Interest expense $29,600.00

Earnings before taxes $216,286.00

Income taxes $86,514.40

Net income $129,771.60